US treasury sells $44 billion of 7- year notes at a high yield of 3.668%

• High yield 3.668%
• WI level at the time of the auction 3.675%
• Tail -0.7 basis points six-month average of 0.1 basis points. Last month the tail was 0.9 bps
• Bid to cover:, 2.63X versus six-month average of 2.54X. Last month it was 2.5X
• Directs (the % of domestic buyers) 20.26% versus six-month average of 16.8%
• Indirects (the % of international buyers) 70.8% versus six-month average of 70.1%
• Dealers (the dealer take the rest) 8.94% versus six-month average of 13.0%.

AUCTION GRADE: A-

The 7 year note auctions came in at a high yield 3.668% which was below the WI level of 3.675% (-0.7 basis point tail). The cover was comfortably above the six-month average The domestic buyers were impressive at 20.26% while above the 16.8% six-month average. Indirects came in roughly near the six-month average (marginally above it). That left little for the dealers to take at 8.94% which was well below the 13.0% average.

That completes the coupon auctions for the week. The 2 and 5 year note auctions were met with solid but average investor demand. The seven year note auctions was the star of the three with a strong demand from domestic buyers.

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