Stellar 20Y Auction Sends Yields Sliding To Session Lows

Historical Stock, Securities, Certificates, Fund, Bonds

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With yields surging yesterday to a 2024 high in a move which sent stocks sliding for a 3rd consecutive day, a dump which extended today as more CTA selling kicked in, but unlike yesterday it is now also manifesting in a flight to bond safety which has pushed yields sharply lower, moments ago the Treasury sold $13BN in 19-Year 10-month reopening of 20Y Treasury cusip TZ1 in what was a stellar auction.

The high yield of 4.818% was 28bps higher than March's 4.542% ad the highest since October's record high 5.257%, but it also stopped through the 4.843% When Issued by 2.5bps, the biggest stop through since Jan 2023.

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The bid to cover was also impressive, rising from 2.79 to 2.82, the highest since June 2023 and clearly well above the six-auction average.

The internals also impressed with Indirects awarded 74.7%, up from 73.5% last month and the highest since February 2023. And with Directs awarded 16.2%, just below the 18.3% six-auction average, dealers were left holding just 9.1%, the lowest since June 2023.

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Overall this was a stellar auction, and one which pushed 10Y yields to session lows of 4.58%, down nearly 10bps on the day, before giving up some of the gains.

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