News Column

Five-Year Note Auction Attracts Slightly Above Average Demand

May 28, 2014

WASHINGTON (Alliance News) - Following yesterday's auction of USD31 billion worth of two-year notes, the Treasury Department sold USD35 billion worth of five-year notes on Wednesday, attracting slightly above average demand.

The five-year note auction drew a high yield of 1.513% and a bid-to-cover ratio of 2.73.

The Treasury also sold USD35 billion worth of five-year notes last month, drawing a high yield of 1.732% and a bid-to-cover ratio of 2.79.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous five-year note auctions had an average bid-to-cover ratio of 2.65.

Peter Boockvar, managing director at the Lindsey Group, said, "With a yield at the lowest level in almost 3 months, the 5-year note auction was uneventful following the ordinary 2-year note auction yesterday."

Finishing off this week's series of long-term securities auctions, the Treasury is due to sell USD29 billion worth of seven-year notes on Thursday.

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Source: Alliance News

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