U.S. Treasury auctions off $34 billion of 10 year notes at a high yield of 2.720%

• Bid to cover 2.43X versus six month average of 2.50X
• Directs (a measure of domestic demand) 17.9% versus a six month average of 16.5%
• Indirects (a measure of international demand) 64.3%% versus a six month average of 70.9%
• Dealers (they take the rest) 18.66% versus a six month average of 12.7%

The last auction came in at a high yield of 1.920% with a tail of 0.3 basis points. The six month averages for tails is -0.2 basis points.

Auction grade: F

Lowlights:

• Tail of 3 BPS vs an average of -0.2 bps
• Directs were the only bright spot at 17.9% above the 6 month average but it did take 3 bp tail too
• Indirects were much lower than the 6-month average. So international investors did not show up
• Dealers are saddled with well above the six month average

CNBCs Santelli gave it a D- grade. He was generous.