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5Y Auction Stops “On The Screws” At Highest Yield Since September 2008

Courtesy of ZeroHedge. View original post here.

After yesterday's better than expected 2Y auction, today the US Treasury sold another $36 billion in debt, this time in 5Y paper, with a cash coupon of 2.75% at a yield of 2.864%, which came "on the screws", i.e., the same as the When Issued, which for the 5Y has been a recurring event having printed "on the screws" on 3 of the last 4 auctions. The yield was fractionally higher than the 2.838% in April, and was the highest stop since the 3.129% in the September 2008 auction.

The internals were also solid, with the Bid to Cover printing at 2.52, above April's 2.49 and stronger than the 6 month average of 2.46. Where the auction was weak was the Indirect award, which at 56.2% came below last month's 60.2%, below the 6MMA of 61.8%, and was the lowest going back to July 2016. And with Directs taking down 10.9%, below last month's 13.7%, it meant Dealers were awarded 32.9% of the auction, the highest since December 2017.

Overall, another mediocre auction, in which the stopping yield and the bid to cover offset the decline in international demand.


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