After yesterday's stellar, stopping through 3Y auction, moments ago the Treasury completed its 10Y reopening of 9-year, 11-month Cusip JZ5, in an auction that was mediocre at best.
The high yield of 4.166% was above last month's 4.093% (in fact it was the highest 10Y auction stop of 2024), and also tailed the When Issued 4.157% by 0.9bps, the biggest tail since December 2023.
The bid to cover was 2.51, a drop from last month's 2.56 and the lowest since November 2023; it was also below the six-auction average of 2.52.
The internals were also subpar with foreign buyers less excited as Indirects took down just 64.3%, down from 71.0% last month and the lowest since December, not to mention below the 66.2% recent average. And with Directs awarded 18.6%, up from 16.1% last month, Dealers were left holding just 17.1%, up notably from last month's 13.0%
Overall, this was an ugly, tailing auction despite the generous concession which saw 10Y yields move almost 10bps higher on the day after the hotter than expected CPI print, which while slamming bonds did just the opposite for stocks where both good news and bad news just serves to drive equities higher.
