The Treasury sold $58 billion of 3-year notes on Monday. The high yield was 4.627 percent. The bid-to-cover ratio was 2.53, TreasuryBonds.com reported. Two more sales follow this week: $42 billion of 10-year notes on Tuesday and $25 billion of 30-year bonds on Thursday.

Each of those figures comes out of the same auction process.

The four steps

Every Treasury security is sold at public auction. That includes bills, notes, bonds, TIPS and floating-rate notes, according to TreasuryDirect.

There are four steps. Treasury announces the sale. It holds the auction. Bidders submit bids. Treasury issues the securities.

The auction date and the issue date can be days or weeks apart.

Treasury publishes a tentative quarterly auction schedule. It usually comes out on the first Wednesday of February, May, August and November.

What is sold

Bills run from 4 to 52 weeks. They are sold at a discount.

Notes have terms of 2, 3, 5, 7 and 10 years. Bonds have terms of 20 and 30 years. Notes and bonds pay interest every six months.

Two kinds of bids

A noncompetitive bid accepts whatever yield the auction sets. The limit is $10 million per auction. The bidder receives the full amount. Most individual investors bid this way. TreasuryDirect accounts can bid only noncompetitively, according to the TreasuryDirect FAQs.

A competitive bid names a yield. The bidder may receive all, part or none of the amount sought. One bidder is limited to 35 percent of the offering, minus any net long position. Competitive bids must go through a bank, broker or dealer.

How the yield is set

Treasury first accepts all noncompetitive bids. It then accepts competitive bids from the lowest yield upward until the offering is filled.

The highest yield accepted becomes the yield for everyone. Every successful bidder receives it. This is a single-price auction.

That yield is the "high yield" in auction results.

What bid-to-cover measures

Bid-to-cover is the total par amount bid divided by the total amount awarded, under federal rules at 31 CFR 356.2. It is a measure of demand.

A ratio of 2.53 means bids totaled about 2.5 times the amount sold.

Who bids

Results sort bidders into three classes.

Primary dealers are one class.

Direct bidders are not primary dealers. They bid for their own accounts directly.

Indirect bidders are customers who bid through a primary dealer or a direct submitter. The group includes foreign and international monetary authorities bidding through the New York Fed. The category does not indicate where a bidder is based.

Monday's 3-year result

The high yield was 4.627 percent. The average of the past 12 auctions was 3.952 percent, according to TreasuryBonds.com.

The bid-to-cover ratio was 2.53. The average was 2.66.

Indirect bidders took 55.5 percent, down from 63.4 percent. Direct bidders took 35.0 percent, up from 24.6 percent.

TreasuryBonds.com described demand as "soft."

The 2-year yield rose about 3 basis points on Monday to about 4.56 percent, CNBC reported. The 10-year yield closed at 4.863 percent, up 0.004 percentage point, according to Tradeweb data reported by Dow Jones via Morningstar.

The rest of the week

The 10-year auction is Tuesday. The 30-year auction is Thursday. Wednesday is Veterans Day, and the bond market is closed, according to Investing.com, citing Reuters.

At its quarterly refunding, Treasury kept coupon auction sizes unchanged. It dropped the words "at least" from its guidance on those sizes. Analysts read that as preparing for larger sales of short- and intermediate-term debt in 2027, Reuters reported.

Treasury also plans up to $70 billion of liquidity buybacks this quarter.

What it means

For a saver buying through TreasuryDirect, the auction sets the yield. The bid is noncompetitive. The saver receives the high yield, like every other winning bidder.

For markets, the auction result is one data point on demand at a given yield. The 10-year and 30-year sales this week add two more.