US Treasury auctioned off $24B of 30-year bonds
- High Yield 5.769%: 6-auction average 4.155%, prev. 4.837%
- WI level at the time of the auction: 4.716%
- Tail 5.3 basis points: 6-auction average 0.9bps, prev. 3.7bps
- Bid-to-Cover 2.24X: 6-auction avg. 2.44x, prev. 2.35x
- Dealers 24.73%: 6-auction avg. 12.7%, prev. 18.2%
- Directs (a measure of domestic demand) 15.16%: 6-auction avg. 18.6%, prev. 16.7%
- Indirects (a measure of international demand) 60.11% : 6-auction avg. 68.6%, prev. 65.1%
Auction Grade: F
- Tail of 5.3 basis points. Ouch.
- The bid to cover is below the 6 month average.
- The dealers are stuck with 24.73% well above the 6 month average of 12.7%. Ouch.
- Directs – a measure of domestic demand – was well below the 6 month average. Ouch
- Indirects – a measure of international demand – was well below the 6 month average. Ouch.
There was nothing good about this auction.
A look at the treasury curve currently shows:
- 2-year yield 4.997% up 5.9 basis points
- 5-year yield 4.625% +10.4 basis points
- 10-year yield 4.634% +12.6 basis points
- 30-year yield 4.810% +15.5 basis points
Rick Santelli on CNBC gave it a D- only because the treasury was able to sell the auction. I guess he has a point. The supply was sold but it took a lot of effort.
Stocks are also turning negative off of the results:
- Dow industrial average is down -158 points or -0.47% at 33953.06
- S&P index is down -20 points or -0.45% at 4363.28
- NASDAQ index is down 71 points or -0.51% at 13580.32