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Subpar, Tailing 10Y Auction Prices At Highest Yield Since July 2019

Courtesy of ZeroHedge View original post here.

After yesterday’s disappointing 3Y auction, which was rocked by the rollercoaster swing in markets on a day-old AFP report, moments ago the US Treasury just sold $34BN in 10Y paper (in a reopening of Cusip CDY4) which came just as the FT was sending out fake news that the UAE had reached out to OPEC+ to urge a production boost, which sparked a flash crash in oil and unleashed a new volatility shockwave across assets.

And, just like yesterday, today’s auction left a lot to be desired, with the bond stopping at 1.92%, tailing 0.3bps to the 1.917% When Issued, and just above last month’s 1.904% high yield.This was the highest yield on a 10Y auction since July 2019.

The Bid to Cover predictably dipped from 2.68 to 2.47, the lowest since December, and  below the 6-auction average of 2.53.

The internals were also weak, with Indirects taking down 68.2%, down from last month’s solid 77.6%, and below the 70.8% recent average. And with Directs taking down 18.0%, Dealers were left with 13.7% of the auction which however now that QE is over, they will be unable to flip back to the Fed in a few days.

Bottom line: the second disappointing, tailing auction in a row, although in light of the market fireworks that hit just as the auction was being completed, it’s not much of a surprise.


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