US treasury auctions often $70 billion of five-year notes at a high-yield of 3.879%

• High-yield 3.879%
• WI level at the time of the auction 3.874%
• Tail +0.5 basis points vs 6 month average of -0.5 basis points
• Bid to cover 2.36X versus 6 month average of 2.39X
• Directs (domestic demand) 24.44% versus 6month average of 18.2%
• Indirects (international demand) 64.68% versus 6-month average of 70.5%
• Dealers (they take the balance and distribute) 10.88% versus 6- month average of 11.3%

Auction Grade:C-

The domestic demand was stronger 24.44%, but that came at the expense of lower demand from international buyers. The bid to cover was near the six month average. The tail of 0.5 basis points was indicative of a below average demand (comparative -0.5 basis points six month average).

For the second day in row the auction grade is below average at C-.

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