Treasuries have moved to their best levels of the day after the US Treasury 7-Year Bond Sale garnered a A+ rating across the fixed Interest desk with strong demand from the international market. The tail was -2.4 basis points with WI level at time of the auction 2.801% and the high yield of 2.777% at the auction. Equity markets have been recovering from last week’s plunge steadily.
Today’s $42 bln 7-yr note -2.4 basis point is indicative of strong demand. The average is -0.5 basis points for this issue. The desk gave a A+ rating on the auction.
- The domestic demand was below its six-month average indicative of softer domestic demand
- International demand (indirect) was also comfortably above the six-month average
- Primary dealers were left with under 10% versus normal around 15.2%
Auction Highlights
- Duration: 7 Years
- Amount: $42 billion
- High yield 2.777% (prev 2.908)
- WI level at the time of the auction 2.801%
- Tail -2.4 basis points vs six-month average of 0.5 basis points
- Bid to cover 2.69Xvs. six-month average of 2.37 times
- Directs 15.76% vs. six-month average of 23.0%.
- Indirects 77.9% vs. six-month average of 61.8%
- Dealers 6.38% vs. six-month average of 15.2%
Auction grade: A+
Yields after the auction
- 2-yr: -1 bp to 2.49%
- 3-yr: UNCH at 2.63%
- 5-yr: UNCH at 2.72%
- 10-yr: +2 bps to 2.77%
- 30-yr: +4 bps to 3.00%
Prior auction results:
- High yield: 2.908%
- Bid-to-cover: 2.41
- Indirect bid: 65.0%
- Direct bid: 19.8%
Average results of previous 12 auctions:
- High yield: 1.641%
- Bid-to-cover: 2.34
- Indirect bid: 61.2%
- Direct bid: 21.6%
Live From the Pit
From The TradersCommunity US News Desk