The U.S. Treasury will auction a record amount ($70 billion) of 5-year notes at 1 p.m. ET. Results will be judged against the 6-month averages of the main components. Below are last month’s auction results and support averages for the major components.
-
High efficiency:
- Previous: 4.235%
- Average over six auctions: 4.288%
-
Tail (tail is the difference between the WI level just before the auction and the high yield auction. A negative tail indicates a strong bid):
- Previous: -1.0 bps
- Average over six auctions: 0.5 bps
-
Bid-to-Cover (Bid to Cover is the number of investor bids relative to the supply of tickets on sale. A higher number indicates greater demand):
- Previous: 2.41x
- Average over six auctions: 2.41x
-
Dealers (Dealers provide liquidity and provide a safety net in case of lower than expected domestic and international demand. A high percentage indicates low demand from normal investors.:
- Previous: 12.7%
- Average over six auctions: 16.7%
-
Directs (Directs are a measure of U.S. domestic demand. A number above the six-month average indicates strong domestic demand):
- Previous: 16.8%
- Average over six auctions: 17.9%
-
Indirects (Indirects are a measure of international demand. A number above the six-month average indicates strong foreign demand for the issuance. The vast majority of U.S. debt is sold to foreign investors):
- Previous: 70.5%
- Average over six auctions: 65.4%
This article was written by Greg Michalowski at www.forexlive.com.
cnbctv18-forexlive