U.S. Treasury to auction off $32 billion of 10 year notes at the top of the hour | Forexlive

The U.S. Treasury will auction off $32 billion of 10 year notes at the top of the hour. The six-month averages of the major components shows:

• Bid to cover 2.56X
• Tail, 1.3 basis points
• Directs (a measure of domestic demand) 18.9%
• Indirects (a measure of international demand) 60.1%
• Dealers (they take the balance) 21.1%

The last auction had a high yield of 4.635% vs the WI level of 4.641% (-0.6 bp tail). The bid to cover was above the six month average at 2.73X.

Yields are higher this month, but the spread to the 2 year yield is more negative. The yield is also just below the 4% level at 3.952%. The Fed is expected to raise rates to a terminal level of near 5.63%. Are investors getting paid enough?

We will get an idea from the results of the auction today.