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. Released on 08/30/2006 Yield Awarded 4.738 % Highlights Demand was unusually strong for the Treasury's monthly offering of 5-year notes, a $14 billion auction posting a high yield of 4.738 percent that proved about 1 basis point lower than expectations. The bid-to-cover ratio was unusually strong, at 3.11 and the best in at least five years. Interest was strong from non-dealers, who were awarded 28 percent of the offering for the highest proportion since January. The results follow strong demand at yesterday's 2-year auction. The prospect of only limited Federal Reserve tightening at most may be boosting demand for Treasuries. Bonds firmed in reaction to the 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 Source: Market News International Legal Notices | © 1998-2006 Econoday, Inc. All Rights Reserved.