The Trader 

Do you really know your bonds?

Nicole Elliott

"After yesterday’s dismal 3Y auction, which was nothing short of a disaster across virtually every metric, moments ago the US Treasury sold $24bn in 9-year 10-month reopening CUSIP 5M8, which was about as close to stellar as one can get. The auction priced at a high yield 2.728%, stopping 0.8 bps through the when [sic] issued of 2.736%, and the lowest yield since January 2018, sharply lower than last month’s 2.915%. The bid-to-cover meanwhile jumped from 2.35 to 2.51. The internals were also strong, with indirects taking down 56.9%, below the 65.3% auction average, largely due to a surge in directs which doubled to 20.8%, the highest since May 2015. This left dealers holding 22.3%, far below the 26.0% auction average."

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