In what was almost a carbon copy replica of yesterday’s 2 Year Treasury auction, moments ago the Treasury sold $34 billion in 5 Year paper, with rates all comfortably positive in the repo market, which explains why the 1.988% high yield once again tailed the When Issued of 1.976%. The tail of 1.2bps was the biggest since last July.
However, unlike the 2 Year auction, the internals in today’s 5 Year issuance were far weaker, and confirming the lackluster demand, the Bid to Cover tumbled to 2.38, well below December’s 2.72, below the 6MMA of 2.47%, and the lowest since July. Additionally, while Indirect interest dipped from December’s 71.4% to 63.3%, it was still modestly higher than the 6 month average of 62.5%. With Directs taking down 4.6%, Dealers were left with 32.1%.
In total, a weak showing in today’s primary market, which explains why the curve has sold off on the report, with the 10Y yield back to day highs.
The post Poor Demand For Tailing 5 Year Auction As Bid To Cover Slides appeared first on crude-oil.top.