Econoday Report: 5-Year Note Auction 29, 2007

2008 Economic Calendar

5-Year Note Auction

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. Twenty-three primary dealers (as of July 2006) 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. Eight times a year, the 5-year notes are announced around the second week of the month (usually on Monday) and then auctioned two days later. In February, May, August and November, they are announced on the first Wednesday of the month and auctioned during the second week of the month (usually on Wednesday). In all cases, the 5-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. Why Investors Care

Yield Awarded

3.416 %

Highlights
Demand for the Treasury's monthly 5-year note auction was moderate but better than yesterday's 2-year auction, with results given a lift by the day's rally in the Treasury market. The award yield of 3.415 percent was right at the when-issued note at the bidding deadline, unlike yesterday's auction when the award yield was above the when-issued yield. The bid-to-cover ratio of 2.26 is soft, the softest since July. Indirects took just 21 percent of the auction, about even with four of the last five auctions but still well below the long term average of 34 percent. Non-competitive bids were light at $117 million. Results of this week's Treasury auctions were mixed, with notes showing weak to moderate demand but bills showing strong demand.

Trends

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

2007 Release Schedule

Released On: 1/25 2/22 3/29 4/26 5/30 6/27 7/26 8/30 9/27 10/25 11/29 12/27

Released For: Dec Jan Feb Mar May Jun Jun Aug Aug Sep Oct Dec