US treasury sells 44 billion of seven year notes at a high yield of 4.123%

• High yield 4.123%
• WI level at the time of the auction 4.121%
• Tail versus six-month averages 0.2 basis points versus six-month average of -1.1 basis points
• Bid to Cover 2.55X vs six-month average of 2.67X
• Directs (domestic buyers) 25.44% vs six-month average of 20.6%
• Indirects (internations buyers) 59.3% versus six-month average of 69.7%
• Dealer 15.3% vs six-month average of 9.7%

Auction Grade: D+

The seven year note auction continued the trend where domestic buyers were stronger than international buyers. In this case the dip in the international buyers more than offset the rise in the domestic buyers. That led to a positive tail of 0.2 basis points in a bid to cover which was less than the six-month average.

As a result, I’ve given the auction grade a D+. It’s definitely below average, and more so than C- grade. It’s not a disaster but it’s below average

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