Foreign Buyers Shun Ugly, Tailing 30Y Auction

Foreign Buyers Shun Ugly, Tailing 30Y Auction

In stark contrast to yesterday’s stellar 10Y auction, moments ago the Treasury concluded its refunding issuance when it sold $27BN in 30Y paper in an ugly, tailing auction that was disappointing in every category.

The High Yield of 2.395% was the highest since November 2019, and tailed the When Issued 2.377% by 1.8bps, the biggest tail since August 2020. The bid to cover of 2.219 was a big drop from 2.466 last month, and also well below the 6-auction average 2.36%.

The internals were sloppy as well, with Indirects – a proxy for foreign buyers – taking down just 59.9%, the lowest since August 2020, below the recent average of 63.1%, with Directs just below April’s 21.9% at 20.1% and above the recent average of 18.3%. This left Dealers taking down 20.1% of the auction, higher than both last month’s 17.1% and the six-auction average of 18.6%.

Overall, a sloppy, disappointing auction as nerves about reflation are finally starting to become all too apparent.

Tyler Durden
Thu, 05/13/2021 – 13:11

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