Heading into today’s 10 Yr Treasury auction, we knew it would be unique no make any difference how it turned out: with $26 billion in notional for sale, it would be the highest amount of 10Y paper sold for this maturity. And with deficits only established to increase from below, it is safe and sound to believe that quite a few additional these kinds of documents will drop in the coming months.
What about the precise information of the auction?
Printing with a large generate of 2.960%, this was “on the screws” with the 2.960% When Issued, and even though higher than the 2.859% in July’s auction, it was down below the 2.965% from June’s auction. What is notable is that so much in 2018 there has not been a single auction that priced with a produce north of 3.00%.
The internals ended up reliable, with the Bid to Go over of 2.55, slightly down from 2.57 in July but better than the 6 auction regular of 2.50. And though yesterday’s 3Y auction observed overseas bidders evidently spooked, right now there was no these kinds of anxieties as Indirects took down 61.3%, down somewhat from 65% final month, but in line with the 61.8% 6 auction ordinary. Directs took down 11.3%, somewhat above the auction normal, which remaining 27.5% for Sellers, a little under the trendline below.
Base line: this was a good auction, even for a “document” issuance, and heading into tomorrow’s 30Y auction, there need to be no significant surprises inspite of yesterday’s badly digested 3Y auction.