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US TSYS/SUPPLY: 5Y Auction Preview – Less Compelling Than Yesterday’s 2Y

US TSYS/SUPPLY
USBulletMarketsFixed Income BulletsNorth America

Treasury sells $70bn of 5Y notes (91282CMA6) at 1300ET after yesterday’s well-received 2Y auction followed Bessent’s weekend pick as Treasury Sec and comments around targeting a US fiscal deficit of 3% GDP.

  • 5Y yields are currently 2.8bps higher on the day having recently dipped 1bp with impetus from lower oil.
  • The WI yield of 4.190% is 5.2bps higher than October’s high yield of 4.138%, still offering some outright interest but less compelling than yesterday’s 2Y where the WI yield was 15bp higher shortly ahead of the auction.
  • Recent 5Y auction stats: the Oct auction tailed by 1.6bps (largest since January) and saw a five-auction average tail of 0.5bp having last stopped through in June.
  • The bid-to-cover was 2.39x in both Oct and the five-auction average.
  • Primary dealer take was 14.17% in Oct (highest since May) vs a five-auction average of 13.2%.
  • Non-dealer takes were more unusual, with indirects taking 76.35% in Oct (highest in our tracking back to 2011) vs a five-auction average of 70.67%. Direct meanwhile took a very low 9.47% vs a five-auction average of 16.09%.
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Treasury sells $70bn of 5Y notes (91282CMA6) at 1300ET after yesterday’s well-received 2Y auction followed Bessent’s weekend pick as Treasury Sec and comments around targeting a US fiscal deficit of 3% GDP.

  • 5Y yields are currently 2.8bps higher on the day having recently dipped 1bp with impetus from lower oil.
  • The WI yield of 4.190% is 5.2bps higher than October’s high yield of 4.138%, still offering some outright interest but less compelling than yesterday’s 2Y where the WI yield was 15bp higher shortly ahead of the auction.
  • Recent 5Y auction stats: the Oct auction tailed by 1.6bps (largest since January) and saw a five-auction average tail of 0.5bp having last stopped through in June.
  • The bid-to-cover was 2.39x in both Oct and the five-auction average.
  • Primary dealer take was 14.17% in Oct (highest since May) vs a five-auction average of 13.2%.
  • Non-dealer takes were more unusual, with indirects taking 76.35% in Oct (highest in our tracking back to 2011) vs a five-auction average of 70.67%. Direct meanwhile took a very low 9.47% vs a five-auction average of 16.09%.