Tailing 10Y Auction Sees Sufficient Demand To Avoid Puke

Tailing 10Y Auction Sees Sufficient Demand To Avoid Puke

Shortly after today’s first bond auction, the $58BN in 3Y notes which saw brisk demand at 1130am ET this morning, moment ago the US Treasury held the second coupon sale for the day when it sold $38 billion in a closely watch 9-year 10-month reopening.

This auction was less enticing to buyers, stopping at a yield of 1.680%, which was the highest since January 2020 and also tailed the When Issued 1.678% by 0.2bps.

The bid-to-cover of 2.36 was in line with recent auctions, which have averaged 2.39 in the past 5 months, if the lowest since December.

The internals were a little better, with Indirects taking down 59.6% of the auction, up from 56.8% and in line with the recent average of 60.0%. And with Directs taking down 16.2%, or the lowest since December as well, Dealers were left holding 24.2%, almost exactly on top of the recent average.

Overall, a mediocre, forgettable auction, however good enough to avoid a market puke, and certainly nowhere close to the devastation unleashed by the catastrophic, infamous 7Y auction at the end of February which started the March bond market turmoil.

Tyler Durden
Mon, 04/12/2021 – 13:15

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