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.

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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%.

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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.

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