Subpar 5Y Auction Sells Another Record Batch Of Debt

Unlike yesterday's stellar 2Y auction, today's sale of 5Y paper was decidedly less impressive.

The bond sale, which raised $61 billion up from $59 billion last month, was the latest record-sized 5Y auction.

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However, unlike yesterday's 2Y auction which saw the yield also drop to a record low, today's 5Y yield actually rose from last month's 0.394% to 0.424%, stopping through the 0.426% When Issued by 0.2bps.

The Bid to Cover of 2.34 was also weaker from last month's 2.39 and in fact, was the lowest since July.

The internals were slightly stronger, however, with indirects taking down 60.5%, up from 57.1% last month and right on top of the 60.3% six auction average. And with Directs taking down 14.1%, Dealers were left with 25.4%, just slightly above last month's 24.9% and the 6-auction average of 24.4%.

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Overall, a forgettable mediocre auction that had no impact on secondary markets, and which is neutral in terms of set up ahead of Thursday's 7Y auction.

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