The US treasury auctions of $32 billion of 10 year notes at a high yield of 3.857%

• High-yield 3.857%
• WI level at the time of the auction 3.847%
• Tail 1.0 basis points versus six-month average of 1.8 basis points
• Bid to cover 2.53X versus six-month average of 2.38X
• Directs (a measure of domestic demand) 19.9% versus six-month average of 20.0%
• Indirects (a measure of international demand) 67.7% versus six-month average of 61.8%
• Dealers (they take the rest) 12.4% versus six-month average of 18.2%

Auction Grade: B+

The 10 year note auction had a one basis point tail but that was less than the 1.8 basis point average over the last 6 months. The bid to cover was comfortably above the six-month average. Domestic demand (directs) were right on the average. International demand was strong, and the dealers were saddled with less than the average. Overall a solid auction despite the one basis point tail