Strong U.S. 3-year Treasury Bond Auction with High Yield of 1.592%

The US Treasury 3-Year Bond Sale performed much better than expected, garnering an A- rating across the Fixed Interest desk with strong demand from the international market. The tail was -.3 basis points with WI level at time of the auction 1.595% and the high yield of 1.592% at the auction. Solid demand ahead of tomorrow’s $37 billion 10-yr note sale. 

The bid-to-cover ratio of 2.45x was above average 2.43x, as was indirect takedown 68.5% vs 54.6% average. The desk gave an A- rating on the auction.

Auction Highlights

  • Duration: 3 Years
  • Amount:  $50 billion
  • High yield 1.592% (prev 1.237%) (When-Issued: 1.595%)
  • WI level at time of auction 1.59%
  • Tail -0.3 basis points
  • Bid-Cover Ratio: 2.45X (prev 2.47) vs six month average of 2.43X
  • Direct Accepted: 11.14% (prev 20.83%) vs six month average of 18.0%
  • Indirect Accepted: 68.55% (prev 61.6%) vs six month average of 54.6%
  • Dealers 20.31% (prev %) vs six month average of 27.4%

Auction grade: A

Yields after the auction

  • 2-yr: +4 bps to 1.33%
  • 3-yr: +5 bps to 1.57%
  • 5-yr: +4 bps to 1.81%
  • 10-yr: +4 bps to 1.96%
  • 30-yr: +4 bps to 2.26%

Average results of previous 12 auctions: High yield: 2.005%

  • High yield: 0.545%
  • Bid-to-cover: 2.44
  • Indirect bid: 53.0%
  • Direct bid: 17.7%

Live From the Pit

From The TradersCommunity US News Desk

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