Bond Auction News

A bond auction is a way a government, SSA or corporate can sell bonds on the primary market. Sovereign bond auctions are generally conducted by national debt management offices. Bond auctions can move the wider bond market as they give an indication of the state of demand in the fixed income market. For example, a bond auction that achieves a high bid-to-cover will indicate that there is strong demand for the bond, and hence will likely push bond prices higher while a low bid-to-cover will indicate weak demand for a bond. A technically uncovered bond auction will show that there was not enough demand in the market to buy all of the bonds on offer (and hence push wider bond prices lower). Ahead of an auction, bond prices can be depressed, whereas post-auction with supply out of the way, prices can recover later in the day.