The bid-to-cover came in at 3.09 and that is a very high grade for overall Treasury demand. What makes this one interesting is that the demand came on the same day as an FOMC meeting result and Bernanke conference call. The other record was 0.88% back in December at the height of the European fears and indirect bidders, which are largely foreign bidders, took a whopping 47.5% of today’s Treasury note auction. The domestic banks and mutual funds took 9.4% of the auction as direct buyers.
Today’s news sort of underscores the notion that investors are still seeking safety over absolute returns because the 5-year part of the yield curve is the intermediate part of the curve and still within the realm of bank and credit union lending.
JON C. OGG
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