Thursday, February 9, 2006
Earlier today, the Treasury auctioned $14.0 billion of 30-year bonds. The issue was sold at a market-clearing yield of 4.530%, and the auction had a bid-to-cover ratio of 2.05.
No relevant past auction data are available, since this is the first 30-year issue the Treasury has sold since it auctioned the 5.375s of 2/15/31 five years ago. However, an opinion I expressed this morning in the "GRA Commentary..." column has indeed come to pass, to wit:
"This will be the first 30-year issue...in five years, and owing to some unusual circumstances, it is likely to come at a very rich, not-too-sensible yield. In the process, it may well wind up configuring the yield curve in an even more peculiar way."
In today's auction, total competitive and noncompetitive tenders were $28.720 billion, excluding an allotment of $0.841
billion to the Federal Reserve System. Additional details are contained in the table below.
Today's auction concludes the Treasury's February refunding operation.
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RESULTS OF THE FEBRUARY 2006
TREASURY REFUNDING OPERATION*
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Bid/
Auct. Amt. Cover Non-
Date (Bils) Maturity Coupon Yield Price Ratio Comp.#
------------------------------------------------------
02/07 $21.0 02/15/09 4.500% 4.595% 99.736+ 2.03 $0.282
02/08 $13.0 02/15/16 4.500% 4.540% 99.681+ 2.32 $0.154
02/09 $14.0 02/15/36 4.500% 4.530% 99.510+ 2.05 $0.139
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*All three issues are dated 2/15/06 and settle on
2/15/06. #Amount of issue (in billions) awarded
based on non-competitive tenders submitted.
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Wednesday, February 8, 2006
Earlier today, the Treasury auctioned $13.0 billion of 10-year notes. The issue was sold at a market-clearing yield of 4.540%, and the auction had a bid-to-cover ratio of 2.32.
By comparison, the 10-year note auctioned in the November refunding went off at a market-clearing yield of 4.578% (off a coupon of 4.500%), with a bid-to-cover ratio of 2.24.
(This looks like a very rich price to me, were the Federal Funds Rate to be hiked to 4.75% at next months FOMC meeting, scheduled for 3/28.)
In today's auction, total competitive and noncompetitive tenders were $30.144 billion, excluding an allotment of $0.841+
billion to the Federal Reserve System. Additional details are contained in the table below.
To conclude its February refunding operation, the Treasury will auction $14.0 billion of 30-year bonds tomorrow (2/9). This will be the first 30-year issue in five years, since the 5.375s of 2/15/31 were auctioned in 2001.
------------------------------------------------------
RESULTS OF THE FEBRUARY 2006
TREASURY REFUNDING OPERATION*
------------------------------------------------------
Bid/
Auct. Amt. Cover Non-
Date (Bils) Maturity Coupon Yield Price Ratio Comp.#
------------------------------------------------------
02/07 $21.0 02/15/09 4.500% 4.595% 99.736+ 2.03 $0.282
02/08 $13.0 02/15/16 4.500% 4.540% 99.681+ 2.32 $0.154
02/09 $14.0 02/15/36 <------ Not Yet Auctioned ------>
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*All three issues are dated 2/15/06 and settle on
2/15/06. #Amount of issue (in billions) awarded
based on non-competitive tenders submitted.
------------------------------------------------------
Tuesday, February 7, 2006
Earlier today, the Treasury auctioned $21.0 billion of three-year notes. The issue was sold at a market-clearing yield of 4.595% (coupon of 4.50%), and the auction had a bid-to-cover ratio of 2.03. This compares with the three-year note auctioned in the November refunding, which went off at a market-clearing yield of 4.458% (coupon of 4.375%), with a bid-to-cover ratio of 2.42.
(At first blush, the bidding for this issue looks a little weak.)
In today's auction, total competitive and noncompetitive tenders were $42.635 billion, excluding an allotment of $1.307 billion to the Federal Reserve System. Additional details are contained in the table below.
To conclude its February refunding operation, the Treasury will auction $13.0 billion of 10-year notes tomorrow, and $14.0 billion of 30-year bonds on Thursday (2/8 and 2/9).
------------------------------------------------------
RESULTS OF THE FEBRUARY 2006
TREASURY REFUNDING OPERATION*
------------------------------------------------------
Bid/
Auct. Amt. Cover Non-
Date (Bils) Maturity Coupon Yield Price Ratio Comp.#
------------------------------------------------------
02/07 $21.0 02/15/09 4.500% 4.595% 99.736+ 2.03 $0.282
02/08 $13.0 02/15/16 <------ Not Yet Auctioned ------>
02/09 $14.0 02/15/36 <------ Not Yet Auctioned ------>
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*All three issues are dated 2/15/06 and settle on
2/15/06. #Amount of issue (in billions) awarded
based on non-competitive tenders submitted.
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