Econoday Report: 3-Year Note Auction 8, 2005

2005 U.S. Economic Events & Analysis

Resource Center » U.S. & International Recaps | Release Dates | Why Investors Care | Today's Calendar

3-Year Note Auction

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. Twenty-two primary dealers (as of August 2004) are authorized and obligated to submit competitive tenders at Treasury auctions. Dealers can hold, resell, or trade the securities with other firms. Four times a year, the Treasury announces the amount, date and time of the 3-year note auction (usually the first Wednesday of February, May, August and November). These notes are usually auctioned during the second week of these months (often on Tuesday) and are issued (settled) on the 15th of the month. If the 15th falls on a weekend or a holiday, they are issued on the next business day. Why Investors Care

Yield Awarded

4.204 %

Highlights
The Treasury's quarterly refunding opened quietly Monday as an under-sized 3-year offering was awarded at a high yield of 4.204%, only a basis point under the when-issued note at the bidding deadline.

Bond prices ebbed slightly in reaction to the results. Next up will be a 5-year auction on Wednesday and a 10-year auction on Thursday.

Trends

When the 3-year note is higher than the federal funds rate, it usually suggests that bond investors are expecting the federal funds rate to rise. Conversely, when the 3-year note is lower than the fed funds rate, it suggests that investors are anticipating a rate cut -- or at least some stability in policy. This chart shows the average monthly 3-year note yield, not the latest auction results.

Data Source: Haver Analytics

2005 Release Schedule

Released On: 2/8 5/10 8/8 11/8

Released For: Jan Apr Aug Oct