30-Year Treasury Auction A Success Ahead of FOMC

The U.S Treasury picked an interesting time to sell a 30-Year Long Bond auction. This was also an early-close auction. After all, this is the day that the FOMC is due to talk about or install more quantitative easing measures. Today's auction was $13 billion of the 29-year and 11-month. The 2.75% coupon Long Bond is set to mature on August 15, 2042.

The Treasury noted, "In view of the upcoming FOMC statement scheduled to be released around 12:30 p.m. on September 13, 2012, the noncompetition and competitive closing times for the 29-year 11-month bond auction to be held on September 13, 2012, will be 11:00 a.m. and 11:30 a.m. ET, respectively."

The bond auction priced at $97.088998 for a yield to maturity of 2.896%.  It is important to know that the on-the-run 30-year WI was at almost 2.91% or so, so this was considered a strong demand auction.  The average bid-to-cover had been 2.62 for prior 30-year auctions, and today's bid-to-cover was 2.68. Some $34,884,951,500 was tendered in dollars.  The low yield was 2.80% and the median yield was 2.86%.

CNBC's Rick Santelli said that he would give this auction a "B+" equivalent of a school grade and that is after prior auctions from the Treasury this week failed to show much interest.

Here is the competitive accepted dollar amounts; Primary Dealer $6,357,550,000 Direct Bidder $1,606,500,000 Indirect Bidder $5,025,900,000


Filed under: 24/7 Wall St. Wire, Banking & Finance, Bonds
Read Full Story

Can't get enough personal finance tips?

Sign up for Finance Report by AOL and get everything from consumer news to money tricks delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.