FX.co ★ Seven-Year Note Auction Attracts Above Average Demand

The Treasury Department reported on Thursday the outcomes of this month's $44 billion auction for seven-year notes, which demonstrated stronger-than-expected interest.

The auction yielded a high return of 3.668 percent and posted a bid-to-cover ratio of 2.63. In contrast, last month's auction of the same amount of seven-year notes resulted in a higher yield of 3.770 percent and a lower bid-to-cover ratio of 2.50. The bid-to-cover ratio, an indicator of the demand, reflects the total number of bids placed on each dollar's worth of securities.

It is notable that the average bid-to-cover ratio for the last ten auctions of seven-year notes was 2.53.

Additionally, the Treasury disclosed earlier this week that the recent auctions for $69 billion of two-year notes and $70 billion of five-year notes experienced slightly below-average demand.