[MMB TCS] After receiving all bids, the auction system ranks them from lowest to highest yield. The government keeps accepting bi...

Understanding bond auctions is crucial for fixed income investors and for gauging government borrowing costs, which can indirectly influence equity markets through interest rates.

• •Explains how government bond auctions work.
• •Bids are ranked from lowest to highest yield.
• •Government accepts bids until the total borrowing amount is covered.
• •Highest accepted yield becomes the cut-off yield.