The US treasury to auction off $60 billion of two-year notes at 1 PM ET

<p>The US treasury will auction off $60B of 2-year notes at 1 PM ET. The auction is the first of the 3 coupon auctions this week. Tomorrow, 5-year notes will be auctioned. On Thursday, the treasury will auction 7-year notes.</p><p>Below are the major component details of the last and the 6-month averages The auction results, will be compared to the 6-month averages to determine strong or weak demand. If the auction is strong, yields should move lower. Conversely, if the auction is weak, yields should continue its move higher. </p><p>High Yield:</p><ul><li>Previous: 4.314%</li><li>Six-auction average: 4.860%</li></ul><p>Tail: The tail is the difference between the yield at the time of the auction (or WI level) and the actual high yield at the auction. A negative tail is indicative of strong demand. A positive tail is indicative of weak demand):</p><ul><li>Previous: -0.6 basis points (bps)</li><li>Six-auction average: 0.1 bps</li></ul><p>Bid-to-Cover: The Bid to cover is the number of bids vs the amount auctioned. </p><ul><li>Previous: 2.68x</li><li>Six-auction average: 2.7x</li></ul><p>Dealers: The dealers bid and take the balance that the domestic and international bidders do not get at the auction.</p><ul><li>Previous: 18.6%</li><li>Six-auction average: 16.9%</li></ul><p>Directs . Direct represent domestic US buyers:</p><ul><li>Previous: 19.5%</li><li>Six-auction average: 20.8%</li></ul><ul><li>Indirects: Indirects represent international buyers. At over 60% they represent the largest buyers of US debt instruments:<ul><li>Previous: 61.9%</li><li>Six-auction average: 62.3%</li></ul></li></ul>

This article was written by Greg Michalowski at

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