Nobody was expecting strong auctions into today’s double issuance of 3 and 10Y paper (despite a near-fails repo rate on the 10Year), and nobody got them.
Moments ago, the Treasury announced it sold $24 billion in 3 Year paper and $20 billion in 10 Year paper, both of which were sold in weak auctions, with the 10 Year tailing the When Issued 1.691% by 0.8 bps, printing at 1.699% at a 2.35 Bid to Cover, in line with recent averages. More notable was the jump in the Dealer bid which rebounded from 20.2% to 34.5%, as Indirects declined from last month’s near record 72.2%. Notably, the Direct bid in the 10Y auction was only 3.4%, the lowest since 2011 as US financial institutions and retail buyers decided to step away from this one.
This post was published at Zero Hedge on Sep 12, 2016.
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