It may be that the Fed Powell Q&A at the Economic Club had influence on demand for the three year notes.
- Treasury sells $40 billion of three or notes that a high yield of 4.073%
- WI level at the time of the auction 4.033%
- Tail four basis points. That is much higher than the -0.3 basis point scene of the last six months.
- Directs (a measure of domestic demand), 21.1% versus 18.2% over the last six months
- Indirects (a measure of international demand) 59.1% versus 60.70% six month average
- Dealers 19.9% versus 21.0% six month average
- Bid to cover 2.33X vs 2.59X six month average
The international demand has been quite healthy of late, but for this auction, the indirect demand was less than the six month average. Ironically domestic demand was above the average which has not been the case for recent auctions.