Ten-Year Note Auction Attracts Mediocre Demand

(RTTNews) - Following yesterday's auction of $32 billion worth of three-year notes, the Treasury Department sold $21 billion worth of ten-year notes on Wednesday.

The ten-year note auction drew a high yield of 2.67 percent and a bid-to-cover ratio of 2.57.

The Treasury also sold $21 billion worth of ten-year notes last month, drawing a high yield of 2.209 percent and a bid-to-cover ratio of 2.53.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous ten-year note auctions had an average bid-to-cover ratio of 2.84.

Peter Boockvar of Morgan Stanley said, "After a decent but uneventful three-year note auction at a yield more than double just a few months ago, the ten-year note auction was mediocre."

"Bottom line, the highest yield since July 2011 didn't bring a stampede of buyers whether due to expectations of a further move higher in yields and/or just complete confusion and unsettlement on the part of buyers after the spike in yields over the past few months thanks to the Fed," he added.

Finishing off this week's series of long-term securities auctions, the Treasury Department is due to sell $13 billion worth of thirty-year bonds on Thursday.