The U.S. Treasury thousand $39 billion of 10 year notes:
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WI level at the time of the auction: 5.317%
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High yield: 5.300%
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WI level at the time of the auction: 5.317%
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Stop-through: 1.7 basis points vs the average of 0.3 basis points
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Bid to cover: 2.77X vs the average of 2.54X
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Directs: 17.2% vs the average of 17.0%
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Indirects: 80.34% vs the average of 74.1%
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Dealers: 2.54% vs the average of 8.8%
Auction grade: A
A strong auction across the board. The high yield came in 1.7 basis points below the WI level, showing buyers were willing to accept a lower yield than the market indicated ahead of the auction. Bid to cover was comfortably above average, while indirect bidders took 80.34% of the issue. Direct demand was marginally above average as well. That left dealers with just 2.54%, well below the 8.8% average ( I am not sure I have seen a level that low). The sizable stop-through, strong overall demand and limited dealer takedown support the A grade.
The US yields are trading at session lows with the two-year at 4.78%. The 10 year is that 5.290%, and the 30 year at 5.670%.
US stocks remained under pressure with the Dow industrial average -0.69%. The S&P index is down -0.28% and the NASDAQ index is down -0.40%. The small-cap Russell 2000 is still the worst performer with a decline of -1.18% while the NASDAQ 100 is down -0.34%.
This article was written by Greg Michalowski at investinglive.com.