U.S. Treasury auctions off $70 billion of five-year notes at a high yield of 4.553%

• High-yield 4.553%
• WI level at the time of the option 4.540%
• Tail: +1.3 basis points versus six average of. -0.1 BPs
• Bid-to-cover: 2.3X versus a six month average of 2.41x
• Dealers: 19.52% versus a six month average of 16.0%
• Directs: 15.44% versus the six-month average of 17.9%
• Indirects: 65.04% versus a six month average of 66.1%

The tail was rather larger 1.3 basis points. The bid to cover was also disappointing. Directs – a measure of domestic demand – was lighter than the month average. The international demand was also lower than average.

Two auctions today and two auctions with sluggish demand.

Auction grade: D+ (which is probably generous)

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