U.S. 5-year Treasury Bond Auction with High Yield of 2.736%

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