US treasury auctions off $24 billion of 30 year bonds at a high yield of 4.769%

<p>US Treasury auctioned off $24B of 30-year bonds</p><ul><li>High Yield 5.769%: 6-auction average 4.155%, prev. 4.837%</li><li>WI level at the time of the auction: 4.716%</li><li>Tail 5.3 basis points: 6-auction average 0.9bps, prev. 3.7bps</li><li>Bid-to-Cover 2.24X: 6-auction avg. 2.44x, prev. 2.35x</li><li>Dealers 24.73%: 6-auction avg. 12.7%, prev. 18.2%</li><li>Directs (a measure of domestic demand) 15.16%: 6-auction avg. 18.6%, prev. 16.7%</li><li>Indirects (a measure of international demand) 60.11% : 6-auction avg. 68.6%, prev. 65.1%</li></ul><p>Auction Grade: F</p><ul><li>Tail of 5.3 basis points. Ouch. </li><li>The bid to cover is below the 6 month average. </li><li>The dealers are stuck with 24.73% well above the 6 month average of 12.7%. Ouch. </li><li>Directs – a measure of domestic demand – was well below the 6 month average. Ouch</li><li>Indirects – a measure of international demand – was well below the 6 month average. Ouch.</li></ul><p>There was nothing good about this auction.</p><p>A look at the treasury curve currently shows:</p><ul><li>2-year yield 4.997% up 5.9 basis points</li><li>5-year yield 4.625% +10.4 basis points</li><li>10-year yield 4.634% +12.6 basis points</li><li>30-year yield 4.810% +15.5 basis points</li></ul><p>Rick Santelli on CNBC gave it a D- only because the treasury was able to sell the auction. I guess he has a point. The supply was sold but it took a lot of effort.</p><p>Stocks are also turning negative off of the results:</p><ul><li>Dow industrial average is down -158 points or -0.47% at 33953.06</li><li>S&amp;P index is down -20 points or -0.45% at 4363.28</li><li>NASDAQ index is down 71 points or -0.51% at 13580.32</li></ul>

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