In the first of two Treasury auctions today, moments ago the US Treasury sold $24 billion in 3 Year paper at a high yield of 1.045%, stopping through the when issued by 0.5bps. The strong headline performance was somewhat unexpected in light of today’s curve action, as well as the lack of any “specialness” in the 3Y repo market. Underscoring the strength of the auction, the bid to cover jumped from last month’s 2.773 to 2.922, well above the 6 month trailing average of 2.815.
The internals were unremarkable, with Indirects getting 52.1% of the auction, Directs stepping up from last month’s unexpectedly low 4.7% and Dealers left holding 37.7% of the final allotment.
And so with the short end well bid in primary, we now look to today’s second auction, the sale of $20 billion in 10Y paper set to price just after 1pm and ahead of today’s FOMC minutes.
via http://ift.tt/2dWpTOj Tyler Durden