WI was trading at at the time of the auction 1.324%

  • High yield 1.332%
  • WI level at the time of the auction 1.324%
  • Bid to cover 2.24 versus six month average of 2.31x
  • Directs 20.92% versus six month average of 19.8%
  • Indirects 60.09% versus six month average of 58.9%
  • Dealers 18.99% versus six month average of 21.3%

The seven year auction was another sloppy auction:

  • tail of 0.8 basis points to the WI level
  • Bid to cover was less than the 6 month average
  • The Directs (domestic demand) and indirects (international demand) was higher than the six month averages but you can argue it took a higher yield to attract the demand. So blah

Grade: D

Traders are demanding higher yields as rates move higher.