3Y Auction Prices At Highest Yield Since May 2007 As Foreign Buyers Slide

While unlike back in March, when the US Treasury had a record amount of Bills, Notes and Bonds for sale, the selling calendar has not been quite as busy, there is still a deluge of paper for sale over the next few days, and following the earlier 4-Week Bill auction, moments ago the US Treasury sold $31BN in 3Y Notes (more than the $30BN sold last month), the largest 3Y auction since August 2013, at a yield of 2.664%, the highest since May 2007 (when 3Y issuance was briefly suspended until Nov. 2008), for the second month in a row just barely tailing the When Issued by 0.1bps.

The internals were medicore, with a 2.76 Bid to Cover, below last month's 2.85 and the 6 month auction average of 2.97.

Indirect bidders, i.e. foreign central banks, dipped again, down from 47.6% to 45.6%, the lowest since last Dec 2016, with Directs taking down 12.3%, above the 6MMA of 9.8% and the highest since July 2016, leaving Dealers with 42.2%, the highest award since Sept. 2017.

Overall, a mediocre auction to start this week's issuance, with all eyes now on tomorrow's 10Y auction as the Treasury ramps up supply to fund its $1+ trillion deficit.


lester1 Tue, 05/08/2018 - 13:41 Permalink

Increased inflation alone means you're going to lose your investment tying up your money for 3 years on these Treasuries. What a bunch of dummies who are buying!

Shibumi2 Tue, 05/08/2018 - 14:12 Permalink

Is it just me, or does the media not report troop casualities any more?


Almost seems like no war, except for the spending part.


Sure are lots of strippers and titilation tho

Rubicon727 Tue, 05/08/2018 - 17:17 Permalink

With Trump's aggressive announcement against Iran, maybe, just maybe European & Asian interests will refuse to buy another US Treasury note. 

That would stop the US military/currency hegemony in its tracks. Pronto