US Treasury Sells $58 Billion in 3-Year Notes at 4.932% as Demand Softens

The US Treasury auctioned $58 billion in 3-year notes on October 6, pricing at a high yield of 4.932%, up sharply from 4.474% at the previous auction and just 0.2 basis points through the when-issued yield of 4.934%, a modest stop-through that signals the auction cleared slightly better than pre-sale market pricing.

Demand was softer compared to the prior sale. The bid-to-cover ratio fell to 2.62 from 2.72 previously, indicating less overall interest relative to the amount offered. Indirect bidders, typically foreign central banks and institutional investors, took 57.6% of the auction, down from 62.1% prior. Direct bidders absorbed 31.7%, up from 26.9%, while primary dealers were left holding 10.7% of the allocation, with 8.35% of bids awarded at the high yield. Markets showed little reaction following the results, with 3-year yields largely steady after the print.