Foreign-Linked Buyers Took Their Smallest Share of a 3-Year Treasury Auction in 15 Months
Quick Read
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Indirect bidders took 56% of the three-year sale, the lowest in 15 months, yet SHY and IEF barely moved, slipping under 0.1%.
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Direct bidders grabbed 35%, the largest share of any three-year auction since at least 2018, while primary dealers took just 9.5%.
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TLT faces the most pressure because it holds the debt most exposed to thinner foreign-linked demand and expected Fed rate hikes.
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On Monday, November 9, 2026, the Treasury sold $58 billion of three-year notes at a 4.627% high yield. Bidders that usually stand in for foreign demand took their smallest share of a three-year sale in 15 months.
Indirect bidders won $32.01 billion, or 55.5% of $57.69 billion in competitive awards. This group includes foreign central banks bidding through the New York Fed and domestic funds bidding through dealers. The last time the share was lower was 53.99% on August 5, 2025.
Treasury funds showed little reaction to the auction. The iShares 1-3 Year Treasury Bond ETF (NASDAQ:SHY) slipped 0.05% to $81.59. The iShares 7-10 Year Treasury Bond ETF (NASDAQ:IEF) fell 0.07% to $91.80, and the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) edged up 0.05% to $81.96.
The auction priced at a lower yield even though markets expect the Fed to raise rates. The high yield came in about 30 basis points below October’s 4.932%, while Fed funds futures price an 84% chance of a December rate rise.
Direct Bidders Took Their Largest Share Since at Least 2018
Direct bidders took $20.21 billion, or 35.0%. That is the highest direct share of any three-year auction since at least 2018, a run of 107 auctions. The direct share has been rising all year, with 31.9% on February 10, 2026 and 31.7% on October 6, 2026.
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