US treasury to sell $39 billion of 10 year notes at 1 PM ET | Forexlive

The U.S. Treasury will sell $30 billion of 10-year notes at 1 PM ET.

Yesterday, the sale of 3-year year notes was a success with the high-yield coming in below the WI level at the time of the auction (a negative tail). Moreover, the treasury will complete the coupon auctions for the week with the sale of 30-year bonds.

The auction will be judged on the components of the auction compared to the six month averages. For comparison the six month averages for major components shows:

• Tail: 0.5 basis points
• Bid to cover: 2.52X
• Directs (a measure of domestic demand): 18.3%
• Indirects (a measure of international demand): 66.2%
• Dealers: 15.5%

Yields are higher today with the 10-year note up about five basis points near 4.15%. Looking at the hourly chart below, the rise in yields is approaching the 38.2% retracement of the move down from the February high at 4.159% and also the following 200 hour moving out to 4.151% (green line in the chart below).