Moments before today’s auction printed just after 1.01pm Eastern, the When Issued was trading at 1.505%, virtually unchanged from last month’s 1.504%, yet what a difference a month makes. Whereas last month the 10Y came with a high yield that tailed by 1.2 bps as Indirect bidders tumbled to the lowest since January 2015, today we have seen foreign central banks flood right back, as Indirects took down a whopping 72.2%, just shy of the all time high seen back in May when Indirects were responsible for 73.5% of the issue.
This also meant that the high yield of 1.503% stopped through, printing 0.2bps inside of the WI, as the Bid to Cover jumped from 2.33 a month ago, to 2.43 if still below the 6 month trailing average of 2.58.
While Indirects spiked, Directs took down a far more modest 7.6% of the auction in line with recent months, leaving only 20.2% to Dealers, who ended up holding only 20.2% of the auction, the lowest amount since June.
Overall, a strong auction and one which has pushed yields across the curve even lower in the kneejerk reaction after the auction, with the 10Y sliding as low as 1.507% moments ago.
via http://ift.tt/2bgvyji Tyler Durden