Some of the component six month averages for comparison

The U.S. Treasury will auction off $41 billion a 10 year notes at the top of the hour. Yields have moved higher since bottoming near 1.13% a week or two ago. The high yield today reached 1.378% which is a pretty big bounce off that low. Nevertheless, the yield is well off the April high of 1.774%.

What are some of the benchmark six month average is for the major components of the recent auctions?

  • Bid to cover, 2.42X. The bid to cover measures the number of bids versus the auction amount. A higher numbers indicative of strong demand.
  • Directs, 17.8%. The percentage total of Direct bids are a proxy for domestic demand.
  • Indirects, 61.5%. The percentage total of Indirect bid are a proxy for international demand which is the largest buyers of US government debt.
  • Dealers, 20.7%. What is not competitively distributed to Direct and Indirect bidders goes to the US government dealers. A high percentage is indicative of low external investor demand. A low number is indicative of strong external investor demand.

The best auctions have:

  • A high bid to cover
  • With high direct and indirect demand and
  • A low dealer number.