U.S. Treasury auctions off $62 billion of the 7 year notes at a high yield of 1.461%

WI level at the time of auction 1.450%

• High yield 1.461%.
• WI level at the time of the auction 1.450%
• Tail 1.1 basis points
• Bid to cover 2.25X vs six month average of 2.31X
• Dealers 16.57% vs six month average of 20.3%
• Direct 19.54% vs six month average of 20.3%
• Indirects 63.89% versus six month average of 59.4%

Auction Grade: D+

Details:

The seven year note auction required a tail of +1.1 basis points above the WI level at the time of the auction which is indicative of tepid investor demand. The bid the cover was less than the six month average. The directs - a measure of domestic demand - was less than the six month average. Indirects were higher than the six month average (a measure of international demand), but that did not come without a bump up in the yield.