2017 Economic Calendar
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3-Yr Note Auction  
Released On 12/11/2017 11:30:00 AM For 12/11/2017 11:30:00 AM
Auction Results
Total Amount$24 B 
Coupon Rate1.875% 
Yield Awarded1.932% 

Results are solid for the monthly 3-year note auction, where coverage, at 3.15, was the highest of the year, and the bidding fairly tight, pulling down the high yield to the awarded 1.932 percent, about 0.1 basis points below the 11:30 bid. End investor demand was strong, with non-dealers taking down 66 percent of the $24 billion offering, their largest share since August. Bidders were likely attracted by the high yield, which at 1.932 percent was 18.2 basis points above last month's rate and the highest awarded at a 3-year auction since June 2009.

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 notes, resell the notes 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 3-year notes are announced around the first week of the month (usually on Thursday) and then auctioned the following week. In all cases, the 3-year notes 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. (Department of the Treasury)  Why Investors Care

Data Source: Haver Analytics
When the 3-year note is higher than the fed funds rate, it usually suggests that fixed income investors are expecting the fed funds rate to rise. Conversely, when the 3-year note is lower than the fed funds rate, it suggests that investors are anticipating a rate cut -- or at least some stability in policy. This chart shows the high yield awarded at monthly 3-year note auctions since February 2012 up to and including the latest auction results.
Data Source: Haver Analytics

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