Session Low Yields Following Exceptional 30Y Auction

Impressive Auction Results

The Treasury recently conducted the final refunding auction of the week, selling $25 billion in 30-year bonds. The auction was highly successful, following an impressive 3-year auction and a decent 10-year auction earlier in the week.

High Yield Details

The high yield of the auction was 4.635%, slightly lower than last month's 4.671% and significantly below the cycle high of 4.837% from October 2023. The yield also stopped through the When Issued 4.642% by 0.7 basis points, a contrast to last month's modest tail. This marks the fifth stopping through auction in the last six.

Bid to Cover Ratio

The bid to cover ratio increased to 2.409% from 2.367%, exceeding the average of the last six auctions, which was 2.38%.

Auction Internals

The internals of the auction were robust. Indirects were awarded 64.9%, a slight increase from 64.4%, but below the recent average of 66.8%. Directs were awarded 19.8%, leaving Dealers with 15.4% of the final auction.

Market Reaction

The market responded positively to the strong close of the refunding week. The demand for the ultra-long dated paper led to a kneejerk reaction, with yields sliding to session lows.

Written by Tyler Durden on Thursday, 09 May 2024 at 13:27.

Thoughts on the Auction

It's clear that the recent 30-year bond auction was a success, with yields sliding to session lows. This is an interesting development in the financial world. What are your thoughts on this matter? Do you think this trend will continue? Feel free to share this article with your friends and discuss it further.

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