ALERT: US 7 year note auction at the top of the hour

<p>The US treasury will auction off $38 billion of 7 your notes at the top of the hour. The summary of the major components and their 6 month averages are outlined below:</p><ul><li>Tail: bps (previous: 0.3bps, six-auction average: -0.2bps)</li><li>Bid-to-Cover: x (previous: 2.47x, six-auction average: 2.73x)</li><li>Dealers: % (previous: 14.6%, six-auction average: 12.0%)</li><li>Directs: % (previous: 19.9%, six-auction average: 17.6%)</li><li>Indirects: % (previous: 65.5%, six-auction average: 70.4%)</li></ul><p>Yesterday's 5-year note auction had a +1.9 basis point tail with a low bid-to-cover as well. International demand was well off the 6-month average.</p><p>The poor auction led to increased selling in US stocks and debt instruments (rates moved higher). Today, yields are lower with the five-year down -7.7 basis points and the 10 year down -5.5 basis points currently. </p><p>US stocks are heading into the auction near lows for the day:</p><ul><li>Dow industrial average is down -212 points or -0.64% at 32827.72</li><li>S&amp;P index is down – -52 points or -1.25% at 4134.93</li><li>NASDAQ index is down -260 points or -2.02% at 12562.53</li></ul>

This article was written by Greg Michalowski at www.forexlive.com.