Tailing, Mediocre 30Y Auction Concludes This Week’s Debt Issuance Surge

After a poor 3 Year auction on Tuesday, a strong, and record-sized, 10 Year auction yesterday, at 1 pm the US Treasury sold $18 billion in 30 Year bonds at a yield of 3.090%, 0.3bps above the When Issued 3.087% – this was the 3rd consecutive 30Y tail – and higher than July’s 2.954% if below the May and April equal highs of 3.13%.

The auction was mediocre with the Bid to Cover sliding from 2.337 last month to 2.274, below the 6 auction average of 2.357 and the lowest since February’s 2.257.

The internals were also in line with recent averages: Indirects were awarded 62.2%, above last month’s 61.9% and the 6 month auction average of 61.1%; Directs dipped from 10.3% to 8.0%, well below the 6 month average of 13.2%, while Dealers were left holding 29.7%, above the 27.8% awarded in July which is also the 6 auction average. 

Overall, an unremarkable auction which despite some weakness on the top line and a decline in overall interest, saw foreigners step up once again to keep the US government machine well funded.