Following yesterday’s tailing 2 Year bond auction, moments ago the Treasury sold another $35 billion in 5 year paper which in today’s soaring bond complex was expected to show scorching demand. Curiously, while the When Issued was trading 1.509%, the actual result showed a 0.4 bps tail at 1.513%, on par with yesterday’s tail. Further adding to the weakness was the Bid to Cover which dipped from last month’s 2.79 to 2.73, and the lowest since January, if modestly better than the TTM average of 2.65. The internals showed a shift away from Directs, whose take down was just 10.5%, below the TTM average of 13.0%, and down from April’s 18.6%. This was compensated by Indirects who ended up with a majority, ot 50.4% of the auction, leaving 39.1% to Dealers, in line with the historical average. So overall a mixed auction, and one which will likely keep traders scratching their heads as the ongoing strength in the secondary market refuses to relent.
via Zero Hedge http://ift.tt/1ouhB1a Tyler Durden