FX.co ★ Twenty-Year Bond Auction Attracts Well Below Average Demand

The Treasury Department reported the outcomes of its recent auction of $16 billion in twenty-year bonds on Wednesday, highlighting a below-average level of demand for the securities. The auction resulted in a high yield of 4.680 percent, with a bid-to-cover ratio of 2.34. This figure is notably lower compared to last month's auction of $13 billion in twenty-year bonds, which achieved a high yield of 4.590 percent and a bid-to-cover ratio of 2.59.

The bid-to-cover ratio is a critical metric for measuring demand, representing how many bids are placed for each dollar's worth of bonds available. Historically, the last ten auctions of twenty-year bonds averaged a bid-to-cover ratio of 2.61.

Looking ahead, the Treasury will release details for the upcoming auctions of two-year, five-year, and seven-year notes on Thursday.