Today’s auction was for roughly $21 billion in 9-year and 11-month notes with a 1.75% coupon going off at $95.933134 for a yield of 2.209%. Some $53.1 billion was tendered and right at $21 billion was accepted. Today’s bid-to-cover ratio was low at 2.53.
Primary dealers submitting bids for the house accounts were actually about 66$% of the total $53 billion in bids but were only about 36% of the total accepted bids. Apparently those dealers were trying to bid on the cheap. Indirect bidders, a signal of foreign demand, came to more than half of total accepted bids at $10.84 billion.
Rising interest rates have been a serious concern for many investors, and we have seen the rotation out of bond-like stocks, higher risk high-yield dividend sectors, and we have seen fixed income instruments in most classes trade softly.
After the auction we have the S&P 500 Index down 6 points at 1,620 and the DJIA down 58 at 15,063. The yield on the 10-year Treasury is currently 2.21%.
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