After 4 consecutive 5Y auctions that resulted in a “tail”, moments ago the Treasury sold $34 billion in 5Y paper which finally “stopped through” the When Issued for the first time since December, printing at a High Yield of 1.831%, 0.7bps through the 1.838% When Issued.
Another confirmation that like yesterday’s 2Y auction today’s 5Y issuance was stronger than expected, was the jump in the Bid to Cover which rose to 2.67, the highest since December, and well above the 2.42 6 month average, as total bids of $95.0 billion were received for $38.1BN in notes. Additionally, the internals were strong too, with Indirecst rebounding from last month’s 57.3% low to 68.7%, above the 6 month average of 63.1%, while Directs were awarded 8.6% of the auction, above the 5.3% in April and 6MMA. Dealers were left just 22.7% of the auction, the lowest going back to August 2016.
Overall, a very strong auction, and certainly better than what the market had expected.
via http://ift.tt/2rUG6c5 Tyler Durden