US sells USD 58bln of 3-year notes; Stop through 1.2bps

The US successfully sold $58 billion of 3-year notes, yielding 3.897%, which is notably higher than previous auctions, indicating a rising rate environment.

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  • High Yield: 3.897% (prev. 3.579%, six-auction avg. 3.579%); WI 3.909%
  • Tail: -1.2bps (prev. 1.1bps, six-auction avg. -0.3bps)
  • Bid-to-Cover: 2.68x (prev. 2.55x, six-auction avg. 2.66x)
  • Dealers: 13.3% (prev. 19.5%, six-auction avg. 12.3%)
  • Directs: 11.9%  (prev. 20.7%, six-auction avg. 25.8%)
  • Indirects: 74.8% (prev. 59.8%, six-auction avg. 61.9%)
Context

The bid-to-cover ratio at 2.68x suggests strong demand, especially as indirect bidders increased significantly, accounting for 74.8%. This auction's outcome, with a positive tail and strong indirect interest, may reflect growing investor appetite for US treasuries amid prevailing economic uncertainties, potentially influencing broader rates and risk sentiment.

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