Technical Analysis

US treasury auctions off $12 billion a 20 year bonds at a high yield of 4.395%

The US treasury auctioned off $12 billion of 20 year bonds. The auction results shows:

  • High yield 4.395%. The last auction came in at 3.82%
  • WI level at the time of the auction 4.370%
  • Tail +2.5 basis points vs. six-month average of -1.3 basis points
  • Bid to cover 2.50X vs. six-month average of 2.69X
  • Directs 19.86% vs. six-month average of 18.5%
  • Indirects 63.7% vs six-month average is 72.2%
  • Dealers 16.43% vs six-month average of 9.3%

Auction Grade: F

The only thing good is the dometic demand was above the 6 month average. The international demand from the indirect bidders was poor. The dealer are saddled with much more than the average.

The Tail was well above the six-month average. The bid to cover was well above the six-month average.

All of this took place with the yield at the highest level for this issue (the 20 year is a relatively new auction issue).

CNBC’s Santelli gave it a D citing the direct bidders but it took a yield 2.5 bps above the WI level. You are an easy grader Mr. Santelli.

US stocks are trading at new low. The 10 year yield is at 4.125%. The 30 year is up 10.4 bps at 4.124%.

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