Treasury 10-Year Note Auction
Earlier today, the Treasury auctioned $15.0 billion of ten-year notes. It was the third and final leg of the agency's May refunding operation.
Today's 10-year issue was sold at a market-clearing yield of 4.840%, and the auction had a bid-to-cover ratio of 2.78. By comparison, the ten-year note sold in the Treasury's February refunding went off at a market-clearing yield of 4.060%, with a bid-to-cover ratio of 2.00.
Total competitive and noncompetitive tenders today were $41.713 billion, excluding an allotment of $2.293 billion to the Federal Reserve System. Additional details are contained in the tables below the April PPI text.
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April Producer Prices
According to this morning's release from the Labor Department, the Producer Price Index (finished goods) rose 0.7% in April. As expected, a large jump in energy prices made a major contribution to the overall rise. The energy component increased 1.6%. Also making a sizable contribution was a 1.4% increase in food prices. Excluding food and energy, the PPI during April was up 0.2%
Year over year, the PPI was up 3.6%. Over the three months ended April, it rose at an annual rate of 5.3%.
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TABLE 1.
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RESULTS OF THE MAY 2004
TREASURY REFUNDING OPERATION*
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Bid/
Auct. Amt. Cover Non-
Date (Bils) Maturity Coupon Yield Price Ratio Comp.#
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05/11 $24.0 05/15/07 3.125% 3.199% 99.790 2.08 $0.317
05/12 $15.0 05/15/09 3.875% 3.927% 99.766 2.64 $0.222
05/13 $15.0 05/15/14 4.750% 4.840% 99.230 2.78 $0.202
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*All three issues are dated 5/15/04 and settle on
5/17/04. #Amount of issue (in billions) awarded
based on non-competitive tenders submitted.
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TABLE 2.
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MAY 2004 TREASURY REFUNDING OPERATION
-- AWARDS TO "PRIMARY DEALERS"
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Total Comp- Award to
et. Tenders "Primary" Award to
Accepted Dealers* "Primary"
Issue -- ($s in Billions) -- Dealers*
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3-Yr. Note $23.683 $12.791 54.0%
5-Yr. Note $14.778 $ 9.442 63.9%
10-yr. Note $14.798 $ 8.282 56.0%
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Total $53.259 $30.515 57.3%
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February 2004 Refunding
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3-Yr. Note $23.772 $12.526 52.7%
5-Yr. Note $15.783 $ 8.927 56.6%
10-yr. Note $15.866 $ 8.630 54.4%
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Total $55.421 $30.083 54.3%
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November 2003 Refunding
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3-Yr. Note $23.785 $14.759 62.1%
5-Yr. Note $15.816 $10.836 68.5%
10-yr. Note $16.844 $10.237 60.8%
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Total $56.445 $35.832 63.5%
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August 2003 Refunding
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3-Yr. Note $23.722 $19.137 80.7%
5-Yr. Note $17.763 $11.879 66.9%
10-yr. Note $17.760 $12.218 68.8%
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Total $59.245 $43.234 73.0%
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May 2003 Refunding
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3-Yr. Note $21.726 $15.709 72.3%
5-Yr. Note $17.784 $11.909 67.0%
10-yr. Note $17.831 $13.565 76.1%
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Total $57.341 $41.183 71.8%
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*The Treasury definition of "Primary
Dealers" is "submitters bidding for
their own house accounts."
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