The U.S. Treasury will auction off $38 billion of tenure notes at the top of the hour. This is the second of two coupon auctions. The treasury will auction off 30 year bonds on Thursday – a day after the FOMC rate decision.

The six-month averages of the major components shows:

• Bid to cover 2.50X
• Tail: 1.1 basis points
• Directs (a measure of domestic demand): 17.53%
• Indirects (a measure of international demand): 65.42%
• Dealers: 17.03%

The auction results will be compared to the above averages. Yesterday the three-year note auction was sold with a 1.1 basis point tail (above the WI level at the time of the auction). The international demand was also much lower than the 6-month average.

This article was written by Greg Michalowski at www.forexlive.com.