US treasury auctions off $13 billion of 20 year bonds at a high yield of 4.466%

• High yield 4.466%
• WI level at the time of the auction 4.467%
• Tail -0.1 basis points vs six-month average of -0.6 basis points
• Bid to cover 2.68X vs six-month average of 2.63X
• Dealers 8.47% vs six-month average of 12.1%
• Directs 14.32% vs six-month average of 18.2%
• Indirects 77.2% vs six-month average of 69.7%

AUCTION GRADE B

The auction came in just below the WI level (-0.1 basis point tail). The Bid to cover (a measure of demand) was near the 6-month average. The dealer were left with much lower than expected as international buyers came in strong – buying 77.2% of the auction which was well above the average of 69.7%.

However, the domestic buyers were much less than the average.

So some good and some average/below average. The mix is good enough for B grade for the auction.

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