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 07/27/2006 Yield Awarded 4.995 % Highlights Demand was moderate for the monthly 5-year Treasury note auction, sold at a high rate of 4.995 percent that was about two basis points above late expectations. But coverage at 2.28 was about average and above last month's auction, while indirect bidding, at 23 percent, was also above last month. Still, bonds dipped following the results, a reaction to the higher-than-expected high rate. Today's auction winds up a week of heavy Treasury issuance, which despite today's mild disappointment proved strong with a solid 20-year TIPS auction on Tuesday and a solid 2-year note auction of Wednesday. 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.