US treasury auctions off $58 billion of 3- year notes at a high yield of 3.908%

• High yield 3.908%
• WI level at the time of the auction 3.902%
• Tail +0.6 basis points versus 0.0 basis points 6- month average
• Bid to cover 2.70X versus 6-month average of 2.62X
• Directs 26.0% versus 6-month average of 16.8%
• Indirects 62.53% versus 6-month average of 67.5%
• Dealers 11.47% versus 6-month average of 15.7%

Auction Grade: B-

The good is that the Bid to cover was high and the domestic bid from direct bidders was great. The bad is that international buyers were not great.

The flow of funds may be out of stocks and into short-term debt instruments like the 3-year note. There was a report on CNBC how IRA money is flowing out of stocks and into fixed income. This is a proof of that idea

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