U.S. Treasury sells $70 billion of 5-year notes at 4.408% yield
Key Takeaways
- •The Treasury auctioned $70 billion of 5-year notes at a high yield of 4.408%.
- •The auction stopped through at a 0.9 basis-point tail, wider than the six-month average of 0.6 basis points.
- •The bid-to-cover ratio was 2.28 times, below the average of 2.33 times.
- •Direct bidders bought 27.22% of the issue, while indirect bidders took 59.25% and dealers took 13.53%.
- •The auction was graded D+ on the basis of weaker-than-average demand measures.
The U.S. Treasury sold $70 billion of 5-year notes at a high yield of 4.408%, compared with the when-issued level of 4.399% at the time of the auction.
The result came with a tail of 0.9 basis points, wider than the six-month average of 0.6 basis points, while the bid-to-cover ratio was 2.28 times, below the average of 2.33 times. In Treasury auctions, those measures are closely watched because they help show how demand compares with recent sales and with the market level heading into the auction.
By buyer type, directs took 27.22% of the issue, above the average of 21.4%. Indirects accounted for 59.25%, below the average of 65.6%. Dealers absorbed 13.53%, slightly above the average of 12.9%.
The auction was graded D+. The assessment noted that the tail was below average, the bid-to-cover ratio was below average, directs were above average, indirects were below average, and dealers were above average, which was described as negative. The note added: "If I grade easy it is a C-, but not today. It is a D+."