US treasury auctions of $44 billion of 7-year notes at a high yield of 4.233%

• High yield 4.233%
• WI level at the time of the auction 4.227%
• Tail +0.6 basis points vs 6 month average of -1.3 bps
• Bid to cover 2.53X vs six with average of 2.69X
• Dealers 12.67% versus average of 9.05%
• DIrects 26.1% versus six month average of 19.64%
• Indirects 61.2% versus six-month averages 71.31% .

Auction Grade:D+

The US treasury had to pay 0.6 basis points above the WI level at the time of the auction. That compares unfavorably to the -1.3 basis point average seen over the last six month auctions. The bid to cover was below the six-month average as well with the dealers settled with a much higher percentage of the auction versus the average.

Domestic buyers were the only bright spot is a or 26.1% versus 19.64% average. International buyers were much lower at 61.2% versus 71.3% six-month average.

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