U.S. Treasury sells $42 billion of 10 year notes at a high yield of 5.02%
The US treasury sold $42 billion of 10 year notes:
- High yield: 5.02%
- WI level at the time of the auction: 5.01%
- Tail: +1.0 basis point vs the average of −0.6 basis points
- Bid to cover: 2.46X vs the average of 2.60X
- Directs: 29.0% vs the average of 15.9%
- Indirects: 61.2% vs average of 76.65%
- Dealers: 9.8% vs the average of 7.45%
Auction grade: D+
The auction was a little soft. The high yield came in 1.0 basis point above the WI level, compared with an average stop-through of 0.6 basis points. Bid to cover fell to 2.46X versus the average of 2.60X, and dealers were left with a larger share than usual. Direct bidders were the bright spot, taking 29.0% versus the average of 15.9%, but that was outweighed by the tail, the softer bid to cover and the higher dealer takedown.