The US treasury to auction off $16 billion at 20 year bonds at the top of the hour

The US treasury will auction off $16 billion of 20-year bonds at the top of the hour. The auction results will be compared to the six-month averages to gauge the relative success or failure of the auction.

Generally speaking, the 20 year is not a favorite for buyers. As a result, its yield is higher than the longer dated 30-year bond despite the positive yield curve.

• 10 year yield 4.561%
• 20 year yield 4.838%
• 30 year yield 4.782%

The six-month averages of the major components shows:

• Tail +1.2 basis points
• Bid to cover 2.54X
• Directs (a measure of domestic demand) 16.9%
• Indirects (a measure of international demand) 67.5%
• Dealers 15.6%

As the auction approaches, the yield curve is steeper with the shorter end lower in the longer and higher.

• Two year yield 4.290, -0.6 basis points
• five year yield 4.393%, unchanged
• 10 year yield 4.561%, +1.6 basis points
• 30 year yield 4.782%, +2.0 basis points

US stocks are mixed with the Dow industrial average and the Russell 2000 lower of the S&P and the NASDAQ indices are modestly higher.

• Dow industrial average -141.18 points or -0.32% at 44414
• S&P index +3.91 points or 0.06% at 6133. Yesterday the index closed at a record level.
• NASDAQ index up 12.09 points or 0.06% at 20053.27
• Russell 2000-10.27 points or -0.45% at 2280.15

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