The US treasury will auction off $42 billion and 7 year notes at the top of the hour.
The 2 year note auction on Tuesday was met by strong demand. The 5 year note yesterday at below average demand.
The 6 month averages of the major component pieces of the auction shows:
- Bid to cover, 2.37X
- Directs (a measure of domestic demand), 23.0%.
- Indirects (a measure of international demand), 61.8%
- Dealers (they take the rest), 15.2%
The last auction high yield came in at 2.908%. That tailed by +1.7 basis points vs the WI level at the time of the auction (bad auction). The 6 month average for tails is +0.5 basis points.
