US treasury auctions office $16 billion of 20 year bonds at a high yield of 4.780%

<ul><li>High Yield: 4.780% vs Previous: 5.245%</li><li>WI level at the time of the auction 4.79%</li><li>Tail: -1.0 bp vs 6-auction average: -0.7bps. Previous: -1.2bps.</li><li>Bid-to-Cover: 2.58 times x vs 6 month average of 2.67X. Previous: 2.59x.</li><li>Dealers: 9.5% versus 6 month average of 10.2%. Previous: 11.9%.</li><li>Directs: 16.5% versus six-month average of 19.7%. Previous: 15.2%.</li><li>Indirects: 74.0% versus six-month average of 70.1%. Previous: 72.9%</li></ul><p>Auction Grade: B+</p><p>Highlights:</p><ul><li>A negative tail which is good</li><li>Bid to cover was average</li><li>Domestic demand was weaker than the six-month average at 16.5%. Not so great</li><li>International demand at 74% was much stronger than the six-month average. Strong demand </li><li>Overall the dealers were left with lower than the six-month average.</li></ul><p>Looking at the US yield curve, the two-year is up marginally but the longer and is trading near lows for the day:</p><ul><li>2-year yield 4.908%, +0.2 basis points</li><li>5-year yield 4.444%, -1.1 basis points</li><li>10 year 4.427%, -1.3 basis points</li><li>30-year 4.572%, -2.5 basis points</li></ul>

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