Auction at 1 PM ET
The U.S. Treasury will Sell $24 billion of 20 year bonds at 1 PM ET. The current 20 year WI yield is trading at 2.13%.
The averages for the key components over the last six auctions shows:
- Bid to cover: 2.33X
- Dealers: 24.5%
- Indirects: 58.0%
- Directs: 17.5%
The bid to cover represents the total amount of bids vs the amount auctioned ($24 billion). The higher the bid to cover, the stronger the demand.
The dealers category is also an indication of demand. The dealer piece is thought of as the leftovers after filling the domestic and foreign demand.
Indirects are a proxy for foreign demand. The category represents the largest percentage of buyers of US debt.
Directs are a proxy for domestic demand from the likes a pension funds and hedge funds, and insurance companies, etc.
This article was originally published by Forexlive.com. Read the original article here.