Econoday Report: 5-Year Note Auction 25, 2007

2007 U.S. Economic Events & Analysis

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

5-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-three primary dealers (as of July 2006) 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 5-year note auction monthly. Eight times a year, the 5-year notes are announced around the second week of the month (usually on Monday) and then auctioned two days later. In February, May, August and November, they are announced on the first Wednesday of the month and auctioned during the second week of the month (usually on Wednesday). In all cases, the 5-year notes 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. Why Investors Care

Yield Awarded

4.855 %

Highlights
Non-dealers such as insurance companies and pension funds showed only modest interest in today's 5-year note auction, making up only 22 percent of the buyers against a long-term average of 36 percent and against 49 percent in the December auction. But taking up the slack were primary dealers, that is financial firms authorized to deal directly with the Treasury. Bid-to-cover for the $13 billion auction was a respectable 2.21 with the awarded yield of 4.855 percent right at expectations.

Today's lukewarm auction concludes what was otherwise a strong week for the Treasury which auctioned off $8 billion of 20-year inflation protected bonds on Tuesday and $20 billion of 2-year notes yesterday. Treasuries showed no immediate reaction to today's results.

Trends

This chart reflects the monthly average yields for 5-year notes in the secondary market. These could be at slight odds with the auction averages in the primary market.

Data Source: Haver Analytics | Consensus Data Soruce: Market News International and Thomson Financial

2007 Release Schedule

Released On: 1/25 2/22 3/29 4/26 5/30 6/27 7/26 8/30 9/27 10/25 11/29 12/27

Released For: Dec Jan Feb Mar May Jun Jun Aug Aug Sep Oct Dec