US treasury sells $13 billion of 20 year bonds at a high yield of 4.632%

• High yield 4.632%
• WI level at the time of the auction 4.646%
• Tail -1.4 basis points vs 6-month average of 1.3 bps
• Bid to cover 2.78X vs 6-month average of 2.52X

Other details:

• Directs 22.35% vs 6-month average of 16.9%
• Indirects 68.84% vs 6-month average of 66.2%
• Dealers 8.81% vs 6-month average of 16.9%

AUCTION GRADE: A+

Nothing bad about this auction which may be indicative of the randomness of US auctions. The 20 year issue is not one that is often in demand. History of auctions typically show a positive tail and relatively lower Bid to cover. Not today.

All components showed solid strength. There was a negative tail, a higher bid to cover. Dealers were left with much less than the average, with above average demand from both domestic and international buyers.

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