U.S. Treasury auctions off $40 billion of 10 year notes at a high yield of 3.695%

• High-yield 3.695%
• WI level 3.723%
• Tail -2.8 basis points versus six-month average of -0.1%
• Bid to cover 2.93X versus six-month average of 2.60X
• Directs 13.66% versus six-month average of 18.9%
• Indirects 73.35% versus six-month average of 62.7%
• Dealers 12.99% versus six-month average of 18.4%

Highlights:

The 3 year note auction was met with very strong international demand. Domestic demand was actually less than the six-month average. The combination left the dealers with much less than the average over the last 6 months which is good.

Overallauction grade: A