Results of the $44 billion sale of 5 year notes by the US treasury:
- High yield 4.228% vs. a WI level of 4.202%
- Tail 2.6 basis points vs. six-month average of 0.6 basis points
- bid to cover 2.27X vs. a six-month average of 2.40X
- Directs 18.7% vs six-month average of 19.0%
- Indirects 59.6% vs six-month average of 61.9%
- Dealers 21.7% vs. six-month average of 19.1%
Auction grade: F
The 5 year yield has shot up as a result of the poor auction (see chart above).
US stocks are trying to hang in there above the lows. Nevertheless the major indices are still lower on the day after hopes of a rebound day faded.
Lowlights:
- A big tail with slack demand. The domestic and international buyers were less than average. The Dealers are saddled with more than average.