High yield 3.878%WI level at the time of the auction 3.871%Tail: 0.7 bps vs six-month average of 0.0 bpsBid to cover: 2.44X versus six-month average of 3.57XDirects (domestic demand): 23.97% versus six-month average of 18.1%Indirects (international demand): 56.87% versus six-month average of 66.1%Dealer: 19.17% versus six-month average of 15.8%
Auction Grade: D
The bad:
The 3-year note auction had a positive tail of 0.7 basis points which was higher than a 0.0 basis point average. The culprit was very low international demand. That came in at 56.87% versus six-month averages 66.1%. The domestic demand was higher near 24% versus 18.1%, but the international demand is always larger and more important.
As a result, the dealers were saddled with a larger than the average amount of the auction to distribute at 19.17%.
This article was written by Greg Michalowski at www.forexlive.com.
