The US Treasury 5-Year Bond Sale performed weaker than expected, garnering a C- rating across the Fixed Interest desk with weaker demand from the international market. The tail was -.4 basis points with WI level at time of the auction 2.732% and the high yield of 2.736% at the auction. The domestic demand was above average reflected in the directs.
The bid-to-cover ratio of 2.44x was below 6-month average 2.45x, as was indirect takedown 62.9% vs 63.9% average. The desk gave a C- rating on the auction.
Auction Highlights
- Duration: 5 Years
- Amount: $48 billion
- High yield 2.736% (prior 12-auction average 1.392%).
- WI level at the time of auction at 2.732%
- Tail -0.4 basis points
- bid to cover 2.44X vs. six-month average of 2.45X
- Direct Accepted: 20.0% vs. six-month average of 17.4%
- Indirect Accepted: 62.9% vs. six-month average of 63.9%
- Dealers 17.0% vs. six-month average of 18.7%
Auction grade: C–
Yields after the auction
- 2-yr: UNCH at 2.50%
- 3-yr: -5 bps to 2.63%
- 5-yr: -4 bps to 2.72%
- 10-yr: -1 bp to 2.75%
- 30-yr: -1 bp to 2.97%
Average results of previous 12 auctions: High yield: 2.005%
- High yield: 1.392%
- Bid-to-cover: 2.43
- Indirect bid: 62.1%
- Direct bid: 17.5%
Live From the Pit
From The TradersCommunity US News Desk