U.S. Treasuries Hit Fresh Lows After 5-year Bond Auction Attracts Weak Demand

US Treasuries hit fresh lows across most tenors after the completion of today’s $45 billion 5-year note auction which received soft demand. The auction garnered a D rating across the Fixed Interest desk. The high yield of 3.230% tailed the when-issued yield by a basis point while the bid-to-cover ratio of 2.30x and indirect takedown 61.2% were both below average.

The bid-to-cover ratio of 2.30x was above 6-month average 2.44x, as was indirect takedown 61.18% vs 63.0% average. The desk gave a D rating on the auction.

Auction Highlights

  • High yield 3.23%
  • WI level 3.220%
  • Tail 1.0 versus 6 month average of 0.4 basis points
  • Bid to cover 2.3X versus 6 month average of 2.44X
  • Dealers 20.61% versus 6-month average of 18.0%
  • Direct 18.22% versus 6-month average of 19.0%
  • Indirect 61.18% versus 6 month average of 63.0%

Auction grade: D

Yields after the auction

  • 2-yr: +9 bps to 3.37%
  • 3-yr: +4 bps to 3.39%
  • 5-yr: +7 bps to 3.25%
  • 10-yr: +7 bps to 3.12%
  • 30-yr: +7 bps to 3.33%

Prior auction results:

  • High yield: 2.860%
  • Bid-to-cover: 2.46
  • Indirect bid: 66.4%
  • Direct bid: 16.8%

Average results of previous 12 auctions

  • High yield: 1.931%
  • Bid-to-cover: 2.43
  • Indirect bid: 62.6%
  • Direct bid: 18.0%

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From The TradersCommunity US News Desk