There was some good news, and some not so good news about the just concluded sale of $38 billion in 3 year notes (Cusip 7C8).
First, the good news was tha tthe yield of 1.857% was 0.4bps below the June auction stop of 1.861% and 0.1% through the When Issued of 1.858%.
The not so good news, however, is that demand across various buyer classes slumped, with the Bid to Cover sliding to 2.62 last month to 2.39, the lowest since March 2009, or in more than ten years. One look at the chart below shows that after peaking in 2012, the BTC for this tenor has been declining progressively for the past 7 years.
As for the internals, they were generally in line, with Indirects taking down 48.5%, down from 56.6% last month but above the the 45.7% six-auction average. And with Directs taking 17.9%, well above the June 13.4% and above the recent average of 16.3%, Dealers were left holding 33.6%, which was also below the recent average of 38%, suggesting somewhat stronger than expected foreign buyer participation.
Overall, a mediocre, forgettable auction, with negatives offsetting the modest positives.
via ZeroHedge News https://ift.tt/2xBVUFt Tyler Durden