The U.S. Treasury will auction off a $52 billion of three-year notes at the top of the hour. The auction is the first of three coupon options this week. Tomorrow the treasury will auction off 10-year bonds and on Thursday they will auction off 30-year bonds:
The major component details from the last auction along with the six-month averages are listed below. Traders will interpret the demand by comparing the actual details of the auction with the six month averages.
- High Yield: Previous auction 4.49%, compared to a six-auction average of 4.587%.
- Tail: Previous auction saw a high 1.7 basis points (bps) tail against a six-auction average of 0.4 bps.
- Bid-to-Cover Ratio: Previous auction at 2.42 times, which was well below the six-auction average of 2.7 times.
- Dealers’ Participation: Previous auction the Dealers took 26.2% in the latest auction, higher than the six-auction average of 17.7%.
- Direct Bidders (proxy for domestic buyers): Previous auction saw domestic participation at 21.7%, slightly above the six-auction average of 20.1%.
- Indirect Bidders (proxy for international buyers) : Previous auction international buyers decreased to 52.1%, below the six-auction average of 62.3%.
2-year yield is at 4.372% up 2.8 basis points. The 10-year yield is trading at 4.009% up 0.8 basis points
The WI is trading at 4.116%.