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Demand For 7 Year Paper Fades In This Week’s Weakest Coupon Auction

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Via Zerohedge

Following two strongish coupon auctions, with both the 2Y and 5Y stopping “on the screws” earlier this week, moments ago the Treasury sold $32 billion in 2Y notes in the weakest auction this week. The offering priced at 2.426%, up from the 2.281% in March which was the lowest since 2017, and also a 0.5bps tail to the 2.421% When Issued.

All the internals also priced just below the recent average, with the Bid To Cover sliding from 2.54 to 2.49, below the 6 month average of 2.51. Directs were allocated 19.1%, the lowest since December, and below the 20.1% six auction average. Indirects took down 60.4%, also a drop from last month’s 64.5%, while Dealers were left with 20.6%, the highest allotment since October 2018.

Overall a mediocre auction, and one which printed just as the 10Y yield had risen back near session highs, although it wasn’t so bad as to move the market.


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