Healthy 3-year Auction

From Reuters:

Treasury debt prices kept a grip on early gains on Tuesday as an auction of new U.S. government debt drew respectable demand, which may bode well for the rest of the week's $51 billion refunding.

The sale of $22 billion in three-year Treasury notes went at a high yield of 3.821 percent. It drew bids for 2.38 times the amount on offer, well above the 2.00 average of previous sales and the highest since the three-year was relaunched in May, 2003.

Indirect bidders, including customers of primary dealers and foreign central banks, picked up $8.66 billion, or 39 percent, of the issue. That was down slightly from February's 44 percent share, but in line with the average of 38 percent and a relief to traders worried that foreign demand could fall sharply. Primary dealers took $12.67 billion of the sale.

Still more auctions to come but this should be reassuring after last week's bond turbulence. I am a bit surprised the market has gotten over the strong jobs report so quickly. More strong data could cause a lot of pain.