After yesterday's 10Y auction priced well ahead of expectations as a burst of buyers crushed any fears there may not be enough demand for the record-sized auction, moments ago the Treasury sold $25 billion ($2BN shy of the record auction size of $27BN hit during the peak of the covid crisis) in 30Y paper in what was a stellar auction.

The high yield of 4.360% was above last month's 4.229% by just over 13bps but more importantly, the auction stopped through the 4.38% When Issued by 2bps, which was not only the third consecutive stop through (after five tails to close out 2023), but was also the biggest stop through since Jan 2023.

The solid demand was not only superficial: the bid to cover rose from 2.37 to 2.40, above the six-auction average of 2.38.

The internals were even better, with Indirects awarded 70.7%, up from 67.8% last month and the highest since last June. And with Directs awarded just 14.5%, below the recent average of 17.2%, Dealers were left holding 14.8% of the auction which while higher than last month's 14.5% was still below the recent average of 17.2%.

Overall, this was an absolutely stellar auction and it pushed yields lower by about 3bps when news of the stellar demand hit, with the 10Y now trading about 4.14% after rising above 4.16% just before the auction. The good news for all those who did not get an allocation today, fear not: there are literally $10 trillion in gross issuance this year and anyone who wants duration will be able to get more than enough of it since this is an election year and Biden has a lot of stimmies he needs to fund...

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