The US treasury auctioned off $13 billion of 20 year bonds:
- High yield 4.590%
- WI level at the time of the auction 4.574%
- Tail +1.6 basis points vs six-month average -0.62 basis points (although the last election was 2.0 basis points)
- Bid to cover 2.59Xvs six-month average 2.63X
- Directs 17.64% vs six-month average 16.93%
- Indirects 67.87% vs six-month average 72.78%
- Dealers 14.5% vs six-month average 10.29%.
AUCTION GRADE:D+
Although better than the last months auction in comparison to the six-month averages, the selection was still weak. The only bright spot was that domestic bidders were higher than the six-month average. International buyers were well below the six-month average and dealers were saddled with more than the average as well. The bid to cover was marginally lower than the six-month average which required a positive tail for the second consecutive month of 1.6 basis points.
This comes even with yields higher by 55 basis points…
