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 2.812% and the high yield of 1.809% at the auction. Solid demand ahead of the results of this month’s auctions of $36 billion worth of ten-year notes and $22 billion worth of thirty-year bonds on Wednesday and Thursday, respectively.
The bid-to-cover ratio of 2.59x was above previous 2.48x, as was indirect takedown 62.0% vs 53.4% average. The desk gave an A- rating on the auction.
Auction Highlights
- Duration: 3 Years
- Amount: $45 billion
- High yield 2.809% (prev 2.738%) (When-Issued: 2.812%)
- Tail -0.3 basis points
- Bid-Cover Ratio: 2.59 (prev 2.48)
- Direct Accepted: 18.0% (prev 17.6%)
- Indirect Accepted: 62.0% (prev 53.4%)
Auction grade: A–
Yields after the auction
- 2-yr: +2 bps to 2.63%
- 3-yr: UNCH at 2.83%
- 5-yr: -7 bps to 2.92%
- 10-yr: -9 bps to 2.99%
- 30-yr: -8 bps to 3.13%
Average results of previous 12 auctions: High yield: 2.005%
- High yield: 0.977%
- Bid-to-cover: 2.43
- Indirect bid: 55.1%
- Direct bid: 17.5%
Live From the Pit
From The TradersCommunity US News Desk