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Three-Year Note Auction Attracts Below Average Demand

In the first long-term securities auction of the new year, the Treasury Department sold $38 billion worth of three-year notes on Tuesday, attracting below average demand.

The three-year note auction drew a high yield of 2.559 percent and a bid-to-cover ratio of 2.44.

Last month, the Treasury also sold $38 billion worth of three-year notes, drawing a high yield of 2.748 percent and a bid-to-cover ratio of 2.59.

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 three-year note auctions had an average bid-to-cover ratio of 2.69.

Looking ahead, the Treasury is due to sell $24 billion worth of ten-year notes on Wednesday and $16 billion worth of thirty-year bonds on Thursday.

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