The US treasury auctioned off $42 billion of 3 year notes yesterday with strong demand from both domestic and international investors. Today, they extend out the curve to the 10 year sector where they will auction off $33 billion at the top of the hour. The key 6 month averages of the major components shows components:

  • Bid to Cover, 2.50X
  • Dealers, 14.2%
  • Directs (a measure of domestic demand), 17.6%
  • Indirects (a measure of international demand), 68.3%

Last month, the high yield came in at 3.03%, with a tail of 1.2% basis points above the WI level. The bid to cover at 2.41X was less than the six-month average with the dealers taking more than the six-month average at 17.0% (vs. 14.2% average). Foreign demand was week at 63.6% vs. 68.3% six-month average