U.S. Treasury auctions off $39 billion of 10 year notes at a high yield of 4.56%

High Yield: 4.56%

• Previous: 4.166%
• Six-auction average: 4.285%

WI level at the time of the auction: 4.529%

Tail: 3.1 basis points

• Previous: 0.9 basis points
• Six-auction average: 0.7 basis points

Bid-to-Cover Ratio: 2.34x

• Previous: 2.51x
• Six-auction average: 2.52x

Dealers: 23.96%

• Previous: 17.1%
• Six-auction average: 16.1%

Directs (a measure of domestic demand): 14.24%

• Previous: 18.6%
• Six-auction average: 18.1%

Indirects (a measure of international demand: 61.8%

• Previous: 64.3%
• Six-auction average: 65.9%

AUCTION GRADE: F

There was nothing good about the auction despite the back up in rates today on the back of the higher-than-expected CPI.

The big to cover was low, the dealer participation was forced higher as both domestic and international demand was soft. The 3.1 basis point tail was also indicative of investors showing away from the auction.

Any gains from initial reaction from Fed members chat, have been erased with the NASDAQ index now down -188 points or -1.16%. The S&P is down -66.45 points or -1.28%.

In the US debt market:

• two year yield 4.966%, +22 basis points
• 5-year yield 4.602% +22.6 basis points
• 10 year yield 4.56 percent, +19.5 basis points
• 30-year yield 4.631% +13.2 basis points

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