US treasury auctions off $35 billion of 7 year notes at a high yield of 4.027%

• High yield Yield A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as A yield represents the earnings generated by an investment or security over a certain time period. Yields are typically displayed in percentage terms and are in the form of interest or dividends received from it.These figures do not include the price variations, which separates it from the total return. Consequently, a yield applies to various stated rates of return on stocks, fixed income instruments such as bonds, and other types of investment products.Yields can be calculated as a ratio or as Read this Term 4.027%
• WI level at the time of auction 4.016%
• Tail 1.1 basis points vs. six-month average of -0.4%
• bid to cover 2.43X vs six-month average of 2.57X
• Directs 22.72% vs. six-month average of 19.1%
• Indirects 63.17% vs. six-month average of 69.0%
• Dealers 14.1% vs. six-month average of 11.9%

Auction grade: D

The only positive was that the domestic demand (direct bids) was higher than the six-month average at 22.72% vs. 19.1%. Other than that, the details of the auction compared to the 6 month averages were all disappointing.

• Positive tail
• lower bid to cover
• lowered international demand through the Indirects
• Dealers were saddled with more of the auction vs the average

Yuck.

The 2 year and 7 year were duds this week led by lower international demand.

The 5 year auction was the best, and led by stronger international demand.