US treasury sells $39 billion of 10 year note at a high yield of 4.166%

• High-yield 4.166% (previous 4.093%)
• WI level at the time of the auction: 4.157%
• Tail: 0.9 basis points versus 6-month average of 0.5 basis points (previous -1.2 basis points)
• Bid to Cover: 2.51x vs 6-month average of 2.52x (previous 2.56x)
• Directs (domestic demand): 18.65% vs 6-month average of 18.3% (previous 16.1%)
• Indirects (international demand): 64.3% vs 6month average of 66.2% (previous 71.0%)
• Dealers 17.06% versus 6-month average of 15.5%

Auction Grade: D

I don’t like it. The Dealers were saddled with more of the issue. There was a positive tail and the Bid to cover was light. The only thing good was domestic demand was larger than the average. That was the only saving grace.

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