The hits just keep on coming. After yesterday’s ugly 2 Year auction, and following last month’s less than stellar, tailing 5 Year auction, moments ago the Treasury sold $34 billion in 5 Year paper in what was another woeful issuance, one where the high yield of 1.18% was a substantial tail of 1.6bps to the 1.164% When Issued, and whose Bid to Cover dropped again, reaching 2.27, the lowest since September 2009.
The internals were also very ugly, with the Indirect takedown sliding to just 53.6%, the lowest since January, Directs buying a paltry 4.7% of the final order, leaving 41.6% to Dealers, the most since August 2015.
In short, the ugly taste left from yesterday’s poor auction was confirmed with today’s issue, which however was to be expected as a result of nervous bidders ahead of tomorrow’s Fed statement which has the potential to wreak havoc on the short end should it comes more hawkish than some expect.
One thing is clear: at least in the primary market, the short end continues to be quite undesirable and unless something dramatically changes, there may be a steep repricing in the coming weeks.
The post Another Ugly Auction: Treasury Sells $34BN in 5Y Paper With Big Tail, Lowest Bid To Cover Since 2009 appeared first on crude-oil.top.