Treasuries have moved to their best levels of the day after the US Treasury 20-Year Bond Sale garnering a B- rating across the fixed Interest desk with strong demand from the international market. The tail was -1.4 basis points with WI level at time of the auction 2.665% and the high yield of 2.651% at the auction. The long bond maintaining its leadership with equity markets selling off.
Today’s $17 bln 20-yr bond -0.2 basis point indicative of strong demand. The average is -0.4 basis points for this issue. The desk gave a B- 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 just over than 10% versus normal around 14.3%
Auction Highlights
- Duration: 20 Years
- Amount: $17 billion
- High yield 2.651% (prev )
- WI level at the time of the auction 3.292%
- Tail -0.2 basis points vs six-month average -0.4
- Bid to cover 2.5X vs. six-month average of 2.56X
- Directs 16.43% vs. six-month average of 19.9%
- Indirects 70.57% vs six-month average of 65.7%
- Dealers 13% vs six-month average of 14.3%
Auction grade: B-
Yields after the auction
- 2-yr: UNCH at 2.67%
- 3-yr: -5 bps to 2.81%
- 5-yr: -6 bps to 2.89%
- 10-yr: -7 bps to 2.90%
- 30-yr: -7 bps to 3.09%
Prior auction results:
- High yield: 2.997%
- Bid-to-cover: 2.38
- Indirect bid: 69.7%
- Direct bid: 16.6%
Average results of previous 12 auctions: High yield: 2.005%
- High yield: 2.217%
- Bid-to-cover: 2.31
- Indirect bid: 65.4%
- Direct bid: 17.6%
Live From the Pit
From The TradersCommunity US News Desk