Treasury sells 5-year notes at 4.845% and 2-year notes at 4.708%, below September's yields

The US Treasury sold $70 billion of 5-year notes at a high yield of 4.845% on Tuesday and $69 billion of 2-year notes at 4.708% on Monday, according to TreasuryDirect auction data. The 5-year yield was 18.8 basis points below September's sale. Treasury had announced the sizes of the sales, as FinanceInTime reported.

What happened

The 5-year auction closed at 1:00 p.m. ET on Tuesday, October 27, with a bid-to-cover ratio of 2.33, the data show. That compares with 2.21 at the September 5-year sale, TreasuryDirect data show. The bid-to-cover ratio is total bids received divided by the amount sold.

Indirect bidders, a group that includes foreign central banks and investment funds, were awarded $41.6 billion, or 60.0% of the competitive amount accepted (computed). Primary dealers took $7.3 billion, or 10.6% (computed), and direct bidders $20.4 billion, or 29.4% (computed).

The 2-year auction closed at 1:00 p.m. ET on Monday, October 26, at a high yield of 4.708% with a bid-to-cover ratio of 2.59. In September the 2-year note cleared at 4.787% with a ratio of 2.63. The yield was 7.9 basis points lower than in September (computed). Indirect bidders were awarded 45.7% of the competitive amount accepted (computed), against 57.8% in September (computed).

Why it matters

Treasury auctions show how much buyers demand at a given yield. Both October sales were the same size as September's, $69 billion of 2-year and $70 billion of 5-year notes, according to the same data. The yields at which they cleared were lower than a month earlier.

What to watch

Treasury is scheduled to sell $44 billion of 7-year notes with a competitive close at 1:00 p.m. ET on Thursday, October 29, according to TreasuryDirect. Results are published by Treasury after each auction.