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 10/26/2006 Yield Awarded 4.694 % Highlights Demand was solid enough for the Treasury's 5-year note auction, sold at a high yield of 4.694 percent that was on the outside of expectations. The bid-to-cover ratio wasn't spectacular either, at 2.12 vs. 2.75 in the September auction and a long term average of about 2.30. Non-dealers showed only moderate demand for the note, representing 22 percent of bids, the same as last month. Today's auction caps off a solid week for the Treasury which saw strong demand at a 5-year TIPS auction on Monday and at the monthly 2-year auction on Tuesday. 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.