US treasury sells $22 billion of 30 year bonds at a high yield of 5.308%

The U.S. Treasury has auctioned off $22 million and 30 year bonds at a high yield of 5.308%WI level at the time of the auction 5.335%Tail -2.7 basis points versus 013 basis points averageBid to cover 2.61X versus average of 2.38XDIrects (domestic buyers) 18.3% versus 22.1% averageIndirects (international buyers) 79.5% versus 66.4% averageDealers (they get the rest) 2.2% versus 11.5% average.I don't think I've ever seen a dealer number as low as 2.2%. The big buyer was international at 79.5%. I wonder if the bond buyback influenced the buying interest today. Of course the US yield are near the highs going back to 2007.   Yields have come off a bit.  US stocks are still down but near the highs.  Crude oil is off $102.60 spike high but still at $101.58. Overall grade:  A Of note is that the U.S. Treasury is starting a series of bond buybacks aimed at improving liquidity and calming volatility in the longer end of the yield curve. The first operation will purchase up to $6 billion of older Treasury securities with maturities between 10 and 20 years. At least six additional buybacks are expected over the coming weeks, with each totaling at least $4 billion.For beginner traders, the Treasury is buying older, less actively traded bonds and replacing that financing by issuing newer securities. That may provide some support for bond prices and help push yields lower.However, this is not quantitative easing. The Fed is not printing money, and the government’s overall debt is not being reduced. The Treasury is largely replacing old debt with new debt.The market was initially disappointed because some traders expected a larger buyback. As a result, Treasury yields moved higher following the announcement. The market is essentially saying the purchases may improve liquidity, but they are not large enough to offset concerns about inflation, government deficits and the continued supply of new debt.A U.S. Treasury auction is how the government borrows money. Investors purchase Treasury securities and receive interest in return. The results can affect yields, the U.S. dollar and stocks.Key components:Auction size: The amount of debt being sold. When-issued yield: The market’s expected yield just before the auction. High yield: The yield needed to sell the entire offering. Tail: The auction yield is above the when-issued yield, signaling weaker demand. Stop-through: The auction yield is below the when-issued yield, signaling stronger demand. Bid-to-cover: Total bids divided by the amount sold. Higher usually means stronger demand, but it should be compared with recent auctions. Indirect bidders: Often foreign and large institutional buyers. Direct bidders: Investors buying directly from the Treasury. Primary dealers: Banks that absorb the remaining supply. A large dealer share can signal weak investor demand. A strong auction typically pushes Treasury yields lower and may support stocks. A weak auction can send yields higher and put pressure on stocks. The most important measure is whether the auction tails or stops through expectations This article was written by Greg Michalowski at investinglive.com.