US treasury auctions off $44 billion a 7-year notes at a high yield of 4.215%

The US treasury will complete the coupon auctions for the week with the sale of $44 billion of 7-year notes at the top of the hour. The six-month averages of the major components of the auction show:

• High yield or .215%
• WI level at the time of the auction 4.235%
• Tail -2.0 basis points vs 6-month average of 0.1 basis points
• Bid to Cover 2.74X vs 6-month average of 2.54X
• Directs (a measure of domestic demand) 20.6% vs. 6-month average of 17.3%
• Indirects (a measure of international demand) 72.0% vs. 6-month average of 70.3%
• Dealers (they take the rest) 7.5% vs. 6-month average of 12.4%

AUCTION GRADE: A

Highlights: All the components were above the 6-month averages.

The Tail was -2.0 basisi points with a bid to cover showing a large number of bids vs the issue amount. The domestic and international buyers were also comfortably above their six month average. That left a small 7.5% for the dealers to absorb which was will below the 12.4% average.

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