Econoday Report: 30-Year Bond Auction 13, 2008

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2008 U.S. Economic Events & Analysis

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30-Year Bond Auction

Definition
Treasury bonds are sold at regularly scheduled public auctions. The competitive bids at these auctions determine the interest rate paid on each Treasury note issue. Twenty primary dealers (as of November 30, 2007) 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 30-year bond auction twice a year - on the first Wednesday of February and August. The bond is auctioned the following week, usually on Thursday and it is issued (settled) on the 15th of the month. If the 15th falls on a weekend or a holiday, it is issued on the next business day. After calling a hiatus in the issuance of 30 Year bonds in 2001, Treasury reinstituted them in February 2006 and followed with another auction in August. Plans are for four auctions in 2007. Why Investors Care

Yield Awarded

4.310 %

Highlights
Demand was poor for the Treasury's 30-year bond auction where the stop-out rate of 4.310 percent was nearly 10 basis points over the 1:00 bid. The bid-to-cover ratio was soft at 2.07. Reaction was swift as money moved out of the Treasury market in response.

Results of the quarterly refunding were mixed showing strong demand for Monday's 3-year note sale, mixed results for yesterday's 10-year auction and poor ones for the 30-year bond. Strong demand is a vital for the Treasury which is facing a mountain of borrowing needs.

Trends

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 | Consensus Data Source: Market News International and Thomson Financial

2008 Release Schedule

Released On: 2/7 5/8 8/7 11/13

Released For: Jan Apr Jul Nov

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