U.S. Treasury auctions off $22 billion of 30 year bonds at a high yield of 4.405%

• High-yield 4.405% versus 4.403% last month
• WI at the time of the auction 4.383%
• Tail +2.2 basis points vs six-month average of -0.9 basis points
• Bid to Cover 2.30X vs six month average of 2.42X
• Dealers 15.88% vs six-month average of 14.9%
• Directs 23.36% vs six-month average of 17.5%
• Indirects 60.76% vs six-month average of 67.6%

AUCTION GRADE: D+

The 30-year bond auction was mixed but mostly worse than the six-month average of the components

The Bad:

• Tail was 2.2 basis points above the WI level at the time of the auction
• Bid to cover was less than the 6 -month average
• international demand (indirect) was much lower than the six month average

The Good:

• Domestic demand was much stronger than the six-month average

Overall, the grade has to be less than the average but the domestic demand saves the day.

This article was written by Greg Michalowski at www.forexlive.com.