MBS LUNCH: 7-Year Auction Results and Market Reaction
January 28, 2010 – 10:03 amPosted To: MBS Commentary
The Treasury has successfully auctioned $32 billion 7-year notes. This was the third consecutive time the 7 year note offering has been at a record $32 billion size. The high yield was 3.127%, which was 0.5 basis points lower than the 1pm "When Issued" yield, which is better than average. The bid to cover ratio, a measure of auction demand, was 2.85 bids submitted for every one accepted by the Treasury. The 7 year note has seen an average bid to cover of 2.571 since the issue was reopened in February 2009, so auction demand was strong! Dealers took 37.1% of the auction. This is below recent auction averages. Direct Bidders took 11.8% of the issuance. This is well above recent auction averages. Indirect Bidders were awarded 51.0% of the auction. Below recent 7 year note auction averages...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.