Sunday , 24 November 2024
Home Forex US treasury auctions off $58 billion of 3-year notes at a high yield of 3.878%
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US treasury auctions off $58 billion of 3-year notes at a high yield of 3.878%

  • High yield 3.878%
  • WI level at the time of the auction 3.871%
  • Tail: 0.7 bps vs six-month average of 0.0 bps
  • Bid to cover: 2.44X versus six-month average of 3.57X
  • Directs (domestic demand): 23.97% versus six-month average of 18.1%
  • Indirects (international demand): 56.87% versus six-month average of 66.1%
  • Dealer: 19.17% versus six-month average of 15.8%

Auction Grade: D

The bad:

The 3-year note auction had a positive tail of 0.7 basis points which was higher than a 0.0 basis point average. The culprit was very low international demand. That came in at 56.87% versus six-month averages 66.1%. The domestic demand was higher near 24% versus 18.1%, but the international demand is always larger and more important.

As a result, the dealers were saddled with a larger than the average amount of the auction to distribute at 19.17%.

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

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