The US treasury auctions of $32 billion of 10 year notes at a high yield of 3.857%

<ul><li>High-yield 3.857%</li><li>WI level at the time of the auction 3.847%</li><li>Tail 1.0 basis points versus six-month average of 1.8 basis points</li><li>Bid to cover 2.53X versus six-month average of 2.38X</li><li>Directs (a measure of domestic demand) 19.9% versus six-month average of 20.0%</li><li>Indirects (a measure of international demand) 67.7% versus six-month average of 61.8%</li><li>Dealers (they take the rest) 12.4% versus six-month average of 18.2%</li></ul><p>Auction Grade: B+</p><p>The 10 year note auction had a one basis point tail but that was less than the 1.8 basis point average over the last 6 months. The bid to cover was comfortably above the six-month average. Domestic demand (directs) were right on the average. International demand was strong, and the dealers were saddled with less than the average. Overall a solid auction despite the one basis point tail</p>

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