The US Treasury 10-Year Bond Sale performed worse than expected following the hot March CPI number released earlier in the day, garnering an F rating across the Fixed Interest desk with strong demand from the international market. The tail was -2.2 basis points with WI level at time of the auction 2.690% and the high yield of 2.720% at the auction. Soft demand after yesterday’s $50 billion 3-yr note sale. The post-auction selling was heaviest in the long bond as shorter tenors remain near their best levels of the day.
The bid-to-cover ratio of 2.43x was below average 2.52x, as was indirect takedown 64.3% vs 65.5% average. The desk gave an F rating on the auction.
Auction Highlights
- Duration: 10 Years
- Amount: $34 billion
- High yield 2.720% (prev 1.920%) (When-Issued: 2.690%)
- WI level at time of auction 2.690%
- Tail -3.0 basis points
- Bid to cover 2.43X versus six month average of 2.50X
- Directs 17.9% versus a six month average of 16.5%
- Indirects 64.3%% versus a six month average of 70.9%
- Dealers 18.66% versus a six month average of 12.7%
Auction grade: F
Yields after the auction
- 2-yr: -11 bps to 2.39%
- 3-yr: -12 bps to 2.61%
- 5-yr: -11 bps to 2.67%
- 10-yr: -6 bps to 2.73%
- 30-yr: +1 bp to 2.83%
Average results of previous 12 auctions: High yield: 2.005%
- High yield: 1.584%
- Bid-to-cover: 2.50
- Indirect bid: 68.5%
- Direct bid: 16.7%
- Directs a measure of domestic demand
- Indirects a measure of international demand
- Dealers take the balance
Live From the Pit
From The TradersCommunity US News Desk