Image Source: Pixabay

With Thursday a holiday, and the Fed statement on Wednesday, it's an especially abbreviated week for bond issuance which is why at 1pm today the Treasury sold $13BN in a 19 Year, 11 Month reopening, which was met with solid demand and passed smoothly. 

The high yield on today's auction was 4.942%, down from 5.047% last month although the second highest going back to October 2023. The yield printed "on the screws" to the When Issued, which also came 4.942% (unclear why the Bloomberg charts shows it as tailing, expect an immediate correction).

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The bid to cover was 2.68, up notably from 2.46 last month and the highest since March (when it was 2.78). It was also 9bps above the 2.59 six-auction average.

The internals were also solid, with Indirects taking down 66.7%, down from 69.0% and just below the recent average of 67.2%. And with Directs awarded 19.9%, Dealers were left holding 13.4%, the lowest since March's 8.8%.

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Overall, this was a solid, smooth auction, yet nothing to write home about, and sure enough there was barely any reaction in the secondary market where yields moved by 1bps point higher after the break. 

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