7-year note auction draws tepid demand

The Treasury just held its much-anticipated 7-year Treasury note auction. The sale of $26 billion in 7-year notes was the third leg in this week's debt sales, which also included 2-year and 5-year auctions. So how'd the auction go? The notes sold at a yield of 3.3%, compared with pre-auction talk of 3.263%. The bid-to-cover ratio was 2.26, down from 2.28 at the last auction. Indirect bidders took down 33% of the notes sold, exactly the same as last month. In other words, not so hot. Long bond futures are trading right about where they were before the auction -- down 15/32 (around the day's low).