2011 Economic Calendar
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30-Yr Bond Auction  
Released On 2/10/2011 1:00:00 PM For 2/10/2011 1:00:00 PM
Auction Results
Total Amount$16 B 
Coupon Rate4.750% 
Bid/Cover2.51 
Yield Awarded4.750% 

Highlights
Results for the 30-year bond auction are mixed and fall right in the middle of yesterday's very strong 10-year auction and Tuesday's very weak 3-year auction. Coverage of 2.51 is slightly above average but falls slightly short of the January auction. The auction stopped out at 4.750 percent which, in a negative, is slightly above the bid at the one o'clock deadline. The 4.750 percent rate is also the issue's coupon which is the highest for a 30-year bond in more than three years, a fact that offers a signpost of the economy's rising strength. Buyside demand looks solid but not spectacular based on how much dealers ended up holding, at 49 percent of the offering which compares with 50 percent in January and against an average of 48 percent. Treasuries are not reacting to today's results.

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
 
[Chart]
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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