Econoday Report: 5-Yr Note Auction October 28, 2009

2009 Economic Calendar

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5-Yr Note Auction

Released on 10/28/2009 1:00:00 PM For 10/28/2009 1:00:00 PM

Auction Results
Bid/Cover	2.63
Coupon Rate	2.375%
Total Amount	$41 B
Yield Awarded	2.388%

Highlights
Results of the $41 billion 5-year auction were solid but less than great especially compared with yesterday's stellar 2-year auction. Coverage for the auction was 2.63, the best in two years despite the record auction size. But bidding was sloppy with the high yield of 2.388 percent more than a basis point above the 1:00 p.m. ET bid. Demand for Treasuruies eased slightly in reaction to the results. The Treasury auctions $31 billion of 7-year notes tomorrow.

Definition
Treasury notes are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. A group of 17 securities dealers (as of June 18, 2009), known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. The Treasury announces the amount, date and time of the 5-year note auction monthly. The 5-year notes are announced around the third week of the month (usually on Thursday) and then auctioned the following week. In all cases, the 5-year notes are issued (settled) on the last day of the month, unless it falls on a weekend or holiday, and then they are issued on the next business day. (Department of the Treasury) Why Investors Care

Data Source: Haver Analytics

This chart reflects the monthly average yields for 5-year notes in the secondary market. These could be at slight odds with the auction averages in the primary market.

Data Source: Haver Analytics

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