The US treasury will complete its weekly note auctions with the sale of $35 billion and 7 year notes at the top of the hour. On Tuesday, the treasuries 2 year note auction was a dud. Yesterday’s 5 year note auction was much better with strong international demand. The 7 year note will cast the deciding vote.
Looking at the last 6 auctions, the component averages shows:
- Bid to cover 2.57X
- Tail -0.4 basis points
- Directs (a measure of domestic demand) 19.1%
- Indirects (a measure of international demand) 69.0%
- Dealers (they are left with the rest) 11.9%.