Following several consecutive, dreadful auctions, moments ago the Treasury sold $28 billion in 7 year paper in an auction that was far less concerning, and could in fact pass off as normal.
Pricing at a high yield of 1.34%, the lowest since April 2013, this stopped through the 1.341% When Issued by the smallest of increments.
The internals, while modestly weaker were not too dramatic. Perhaps the most notable metric was the Direct takedown of 7.71%, which was the lowest since December 2014. Indirects took down a respectable 65.5%, one of the highest on record, while Dealers ended up with 26.82%, the highest since February. The curious fact here is that while Indrect bidders had been lagging in recent auctions, they had no problem to purchase as much as they could get at the belly of the curve.
The market was pleased by the reaction, and there was no violent move across the curve as a result.
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