Auction history: US is to sell USD 70bln in 5-year notes at 17:00GMT/13:00EDT

• High Yield: (prev. 5.033%, six-auction avg. 4.362%)
• Tail: (prev. 3.1bps, six-auction avg. 0.9bps)
• Bid-to-Cover: (prev. 2.21x, six-auction avg. 2.31x)
• Dealers: (prev. 15.8%, six-auction avg. 13.0%)
• Directs: (prev. 29.9%, six-auction avg. 23.1%)
• Indirects: (prev. 54.3%, six-auction avg. 64.0%)

The 5-year sits mid-curve and has historically been the belly point most sensitive to the policy path rather than to term premium, so its auctions have tended to pass quietly when the rate outlook is settled and to tail when the market is repricing the front end. The prior takedown was soft by the usual metrics: a tail well above the recent average, a below-average bid-to-cover, an indirect share materially under its norm, and dealers left with a larger than usual residual. Whether that weakness was idiosyncratic or the start of a run of sloppy concessions is the open question, since sequences of poor 5-year results have in the past fed directly into how the following 7-year and the belly of the curve trade. Indirect participation is the tell for foreign and real-money sponsorship at this tenor, and its recent dip against the average is the line most watched for recovery or confirmation. The setup heading in is defined by the concession built since the previous sale and where the when-issued trades relative to the stop at the deadline. As an auction preview the content is mechanical; the signal comes at the result.