Five-Year Note Auction Attracts Weak Demand

(RTTNews) - Following yesterday's auction of $29 billion worth of two-year notes, the Treasury Department sold $35 billion worth of five-year notes on Wednesday, attracting weak demand.

The five-year note auction drew a high yield of 1.567 percent and a bid-to-cover ratio of 2.36.

Last month, the Treasury also sold $35 billion worth of five-year notes, drawing a high yield of 1.80 percent and a bid-to-cover ratio of 2.56.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous five-year note auctions had an average bid-to-cover ratio of 2.74.

The below average demand comes as the Federal Reserve is expected to announce plans to wrap up its asset purchase program later this afternoon.

Finishing off this week's series of long-term securities auctions, the Treasury is due to sell $29 billion worth of seven-year notes on Thursday.