Yields Hit Session High After 20Y Auction Tails Most Since February

Just days after a handful of ugly (if not that ugly) coupon auctions hit the tape, moments ago the Treasury sold the last coupon issuance of the week when it priced another $24BN in 7 year paper in the form of a 19Y-10M reopening of Cusip SY5.

The auction was ugly: with a high yield of 1.890%, it was lower than last month’s 2.12% which is to be expected following the recent plunge in yields, but despite today’s continued move wider in yields, the auction still tailed the When Issued 1.878% by 1.2bps, the biggest tail since Feb.

The bid to cover dropped from 2.40 in June to 2.33, right on top of the six-auction average. The internals were average: Indirects took doown 60.2%, down from 62.1% last month, if above the recent average. And with directs also sliding from 20.4% to 18.9%, Dealers were left holding 20.9%, which was above June’s

Keep reading this article on Zero Hedge - Blog.

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