U.S. Treasury sales of $40 billion of 3 year notes a high yield of 3.977%

• High-yield 3.977% versus WI level of 4.000% at the time of the auction
• tail -2.3 basis points.
• bid to cover 2.84X versus six month average of 2.52X
• directs 13.2% versus a six month average of 19.3%
• indirect 69.5% versus six month average of 59.2%
• primary dealers 17.3% versus six month average of 21.5%

The only dim spot was the domestic demand was weak at 13.2% vs 19.3%, but that was more than made up by the international demand which was a full 10% higher than normal. Dealers were saddled with 4% less than normal.

Overall a solid B grade ignoring the lack of domestic demand

/inflation