U.S. Treasuries completed this week’s note auctions with a weak $35 bln 7-yr note auction. U.S. Treasuries had been selling off after the mornings GDP and Jobless Claims data. The sale drew a high yield of 3.3.563%, which tailed the when-issued yield by 1.3 bps, the bid-to-cover ratio (2.41x) and indirect takedown (64.1%) were below average. The fixed interest desk rated the auction a D-. Yesterday treasuries completed a $43 bln 5-yr note auction which met strong demand. Tuesday, we saw a $42 bln 2-yr note C rated auction.
Equities trade near their best levels of the session after another slate of mostly positive earnings news. Meta Platforms (META 240.66, +31.23, +14.9%) boosting index performance and driving buying interest in other mega caps. Dow +332.12 at 33633.90, Nasdaq +227.98 at 12082.31, S&P +53.78 at 4111.04
- The domestic demand was above its six-month average indicative of stronger domestic demand
- International demand (indirect) was below the 12-month average
- Primary dealers were left with 15.4% versus normal around 12.8%
Auction Highlights
- Duration: 7 Years
- Amount: $35 billion
- High-yield 3.563%
- WI level at the time of the auction 3.550%
- Tail 1.3 basis points vs six-month average of 0.9 basis points
- Bid to cover 2.41X v six-month average of 2.46X
- Directs 21.08% v six-month average of 19.1%
- Indirect 64.1% v six-month average over 66.5%
- Dealers 14.8% v six-month average of 14.4%
Auction grade: D–
Yields after the auction.
- 2-yr: +11 bps to 4.03%
- 3-yr: +10 bps to 3.77%
- 5-yr: +7 bps to 3.55%
- 10-yr: +6 bps to 3.49%
- 30-yr: +4 bps to 3.73%
Yields before the auction.
- 2-yr: +11 bps to 4.03%
- 3-yr: +10 bps to 3.77%
- 5-yr: +7 bps to 3.55%
- 10-yr: +6 bps to 3.49%
- 30-yr: +4 bps to 3.73%
Prior auction results:
- High yield: 3.626%
- Bid-to-cover: 2.39
- Indirect bid: 63.2%
- Direct bid: 21.4%
Average results of previous 12 auctions:
- High yield: 3.481%
- Bid-to-cover: 2.52
- Indirect bid: 67.7%
- Direct bid: 19.1%
Live From the Pit
From The TradersCommunity US News Desk