US treasury sells $38 billion 10 yr notes at a excessive yield of 4.680%

The US Treasury sold $38 billion of 10 year notes. Details of the auction showed:

• High yield 4.680%
• WI level at the time of the auction 4.678%
• Tail +0.2 basis points vs six-month average of -0.1 basis points
• Bid to cover 2.53X vs. six-month average of 2.55X
• DIrects (a measure of domestic demand) 23.0% vs. six-month average of 17.0%
• Indirects (international demand) 61.4% vs six-month average of 69.9%
• Dealers 15.6% vs six-month average of 13.1%

AUCTION GRADE: C-

Result summary: The 10 year note auction had a modest 0.2 basis points tail versus -0.1 basis point six-month average. The bid to cover was near the average as well. What was disappointing is that the dealers were saddled with 15.6% versus 13.1% average. The international demand was well below the six-month average at 61.4% versus 69.9%. However, domestic demand made up for most of the shortfall.

Overall, the grade was a little less than average