Preview Tsy 5Y Note Auction

Size of the upcoming 5Y note (91282CBW0) auction is the fourth consecutive offering at $61B, up from $59B in December. ($57B 13W Bill auction at same time).

Notably, 5Y auction performance has averaged a modest -0.4bp tail over the last five months, and may continue with 5Y yield currently running around 0.842% vs. last month's high yield of 0.850% that tailed vs. 0.847% WI.

• Bid-to-covers have averaged around 2.34x in the last 5 months, with March at 2.36x and a low of 2.24x in February.
• Indirect take-up was 58.03% in March, compared to the 5 month range of 56.45%-60.47%, and well off last year's 66.22% (when the auction size was $10B less at $51B). Primary dealers took down 25.28% last month, the lowest since 24.91% in December.
• Direct take-up picked up to 16.60% last month after holding around 14.14%-14.38% since November (with the exception of 17.96% in December, the highest in over a year).
• The next 5Y auction is tentatively scheduled for May 26.
• Timing: The 5Y note will be auctioned alongside the 13W bill with results available shortly after the competitive auctions closes at 1300ET.