Ten-Year Note Auction Attracts Above Average Demand

(RTTNews) - Following yesterday's auction of $25 billion worth of three-year notes, the Treasury Department sold $21 billion worth of ten-year notes on Wednesday, attracting above average demand.

The ten-year note auction drew a high yield of 2.214 percent and a bid-to-cover ratio of 2.97.

The Treasury sold $24 billion worth of ten-year notes last month, drawing a high yield of 2.365 percent and a bid-to-cover ratio of 2.52.

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 2.69.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, the U.S. ten-year yield looks attractive [compared] to almost all of its peers."

"Combined with Fed driven short rates that are going up next year (Fed will be responding to the U.S. labor market) on top of global growth concerns, the flat yield curve trade will most likely continue," he added.

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