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%.