• High-yield. 4.217%
• WI level at the time of the auction 4.210%
• Tail 0.7 basis points versus 6 month average of 0.3 basis points
• Bid to cover 2.45X versus 6 month average of 2.48X 6 month average of
• Directs 12.8% vs 6 month average of 20.3%
• Indirects 74.5% versus 6 month average of 69.3%
• Dealers 12.7% versus 6 month average of 10.3%

Auction Grade: C-

The 10-year note auction came in with below-average demand, though it was not as weak as the 3-year auction held yesterday.

The auction tailed by 0.7 basis points above the six-month average, indicating investors required a slightly higher yield to take down the supply. The bid-to-cover ratio was roughly in line with the six-month average, suggesting overall participation was steady but not particularly strong.

Looking at the breakdown of buyers, domestic demand was notably soft, accounting for just 12.8% of the issue, well below the recent average. That weakness was partially offset by stronger international demand, which helped absorb some of the supply.

With end-user demand somewhat muted, primary dealers were left taking a larger share, coming in at 12.7% compared with the six-month average of 10.3%.

Overall, the auction was not as poor as yesterday’s 3-year auction—which earned a “D” grade—but it still fell short of being considered a strong result.