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Week's First Treasury Auction Earns 'B' Grade

The 1.776 percent yield alone garnered Tuesday's $40 billion, 3-year note auction a solid 'B' for above average.

The auction’s 3.10 bid-to-cover was higher than the 2.93 ten-year auction average. The 52.3 percent indirect bidders and the 10.7 percent direct bidders represented solid demand, without any single group dominating.

Tuesday’s Treasury auction is the second of four scheduled this week, including a TIPS auction yesterday. The other two are Wednesday’s $21 billion 10-year and Thursday’s $13 billion 30-year. All are settled on April 15.

Recent Treasury auctions delivered poor yields: One, in fact, deserved a barely passing grade of 'D'—for dog.

At the time, some analysts speculated the previous auctions' weak showings were a reflection of waning confidence in the Democratic-run Congress and in the Obama Administration and a reaction to the passage of the health-care bill and plans for additional expensive programs.