Treasury sells $58 billion of three-year notes at 4.627%
The auction priced slightly above the pre-sale yield, with direct buyers offsetting a smaller indirect share.
The Treasury sold $58 billion of three-year notes Monday at a high yield of 4.627%, with bids totaling 2.53 times the amount offered. The sale opened the week's refunding auctions ahead of Tuesday's consumer-price report.
The notes carry a 4.625% coupon and mature on November 15, 2029. The auction yield and the coupon are different: the coupon sets the interest payments, while the price paid determines the yield to the buyer.
A small tail, with uneven participation
The high yield was 0.5 basis points above the 4.622% when-issued level just before the sale, according to InvestingLive. That is called a tail: buyers received a slightly higher yield than the market had indicated immediately before the auction. One basis point is one-hundredth of a percentage point.
Direct bidders took about 35% of competitive awards, indirect bidders about 55.5% and primary dealers about 9.5%. InvestingLive described overall bidding as below its recent average, while stronger direct participation helped limit the amount dealers had to take.
The result is a snapshot of demand for this particular sale, not a decision by the Federal Reserve or a verdict on all Treasury debt. The next inflation reading can change the rates outlook after today's auction is complete.
