2016 Economic Calendar
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30-Yr Bond Auction  
Released On 6/9/2016 1:00:00 PM For 6/9/2016 1:00:00 PM
Auction Results
Total Amount$12 B 
Coupon Rate2.500% 
Bid/Cover2.42 
Yield Awarded2.475% 

Highlights
Results are strong for the monthly 30-year bond auction despite the low yield awarded, at 2.475 percent 14 basis points lower than in the May auction and the lowest high yield awarded since January 2015. Coverage, at 2.42, was the best for the bond this year, and bidding was tight, pushing down the high yield about 0.3 basis points below the 1:00 bid. Though not quite as strongly as in yesterday’s 10-year auction, demand from end investor accounts was in charge again, with non-dealers taking down 73 percent of the $12 billion offering. Today’s auction was a reopening of the 30-year bond originally issued in May, and the bonds sold will mature in 29 years and 11 months.

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 securities dealers, known as primary dealers, are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold the bills, resell the bills to their clients or trade them with other securities firms. Typically, the New York Fed approves about 20 securities firms to be primary dealers but that number dropped sharply during the 2008 financial crisis as some were merged into other firms or went bankrupt. The Fed has been rebuilding that number regularly and the latest list can be found here. The Treasury announces the amount, date and time of the 30-year note auction. Through 2008, the 30-year bond auctions had been quarterly. In 2009, the Treasury added more auctions that recur almost monthly to help fund the expanded federal deficit. The 30-year bonds are announced around the first week of the month and then auctioned the following week. Generally, the 30-year bonds are issued (settled) on the 15th of the month, unless it falls on a weekend or holiday, and then they are issued on the next business day. The issuance of new 30-year bonds went on hiatus in 2001 but the Treasury reinstituted them in 2006. (Department of the Treasury)  Why Investors Care
 
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Data Source: Haver Analytics
 
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This chart reflects the monthly average yields for 30-year bonds 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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