U.S. 5-year Treasury Bond Auction High Yield of 2.86% with Solid Demand

US Treasuries held near their lows after the completion of today’s $46 billion 5-year note auction which received solid demand. The auction garnered a B+ rating across the Fixed Interest desk with stronger demand from the international market. The tail was -1.0 basis points with WI level at time of the auction 2.87% and the high yield of 2.86% at the auction. The domestic demand was below average reflected in the directs.

The bid-to-cover ratio of 2.46x was above 6-month average 2.44x, as was indirect takedown 66.37% vs 63.4% average. The desk gave a B+ rating on the auction.

Auction Highlights

  • High yield 2.86%
  • WI level 2.87%
  • Tail -1.0 basis point vs six-month average of +0.4 basis points
  • Bid to cover 2.46X vs. the six-month average of 2.44X
  • Dealers 16.81% vs. six-month average of 17.7%
  • Directs 16.81% vs. the six-month average of 19.0%
  • Indirects 66.37% vs. six-month average of 63.4%

Auction grade: B+

Yields after the auction

  • 2-yr: -2 bps to 3.02%
  • 3-yr: +1 bp to 2.98%
  • 5-yr: -2 bps to 2.88%
  • 10-yr: -3 bps to 2.79%
  • 30-yr: -4 bps to 3.01%

Prior auction results:

  • High yield: 3.271%
  • Bid-to-cover: 2.28
  • Indirect bid: 56.5%
  • Direct bid: 19.7%

Average results of previous 12 auctions

  • High yield: 1.752%
  • Bid-to-cover: 2.42
  • Indirect bid: 61.9%
  • Direct bid: 18.1%

Live From the Pit

From The TradersCommunity US News Desk