Today’s auction of $35 billion in five-year Treasury notes produced a high yield of 0.76%, about two basis points above the yield at last month’s auction of five-year notes. The yields were higher as demand for U.S. debt improves following the fiasco in the eurozone with Cypriot banks.

The bid-to-cover ratio, which indicates demand for the notes, was 2.73, compared with an average ratio of 2.86 for the past six auctions.

Indirect bidders, including foreign central banks, bought 46.1% of the notes and direct bidders, including domestic money fund managers to 16.8%. Indirect purchasers have averaged 40.6% of sales in the past six auctions.

Today’s results are a bit more encouraging than yesterday’s weak demand for $35 billion in two-year notes. The bid-to-cover ratio in yesterday’s auction was the lowest since July of 2011. The median yield was just 0.244%.

Demand for U.S. debt remains reasonably strong, and as long as the eurozone continues to threaten depositors accounts and gold prices continue to be soft, there are not many alternatives for investors to choose from to minimize risk.

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