- At the auction, the high yield was 3.575%, with a WI level of 3.58%. The tail was -0.5 bps in comparison to the 6 month average of 2.0 bps.
- The bid-to-cover ratio was 2.53X compared to the 6 month average of 2.35X.
- The domestic demand, as measured by directs, was 17.92% compared to the 6 month average of 18.6%.
- Indirects (measuring international demand) came in at 67.02%, which was higher than the 6 month average of 62.0%.
- Lastly, dealers, who are left with the residual, had 15.06% as opposed to the 6 month average of 19.4%.
The grading of this auction is considered to be a B+.
The global demand once again provided the necessary support, taking 67.02% of the auction compared to the city average of 62%. Domestic demand was lower than expected, at 17.92% versus the average of 18.6%. Dealers had to take on a smaller than usual portion of 15.06%.
The auction had a tail of -0.5 basis points, which is much more advantageous than the 2.0 positive tail in the last half year. The bid-to-cover ratio was higher than the 2.35X 6-month mean (2.53X).
The only issue to be found from yesterday’s three-year note auction was the lack of domestic demand.
Tomorrow, the treasury is going to hold an auction of thirty-year bonds.
