Strong Demand For 30Y Treasurys In Week's Final Auction

Just like yesterday's 10Y auction, which priced only a few basis points away from the August high yield, so moments ago the week's final auction, a 30 Year reopening of Cusip SD1 priced just barely away from the August auction, stopping at 3.088%, on the screws with the 3.088% When Issued, and 0.2bps lower than the 3.090% last month. This shows just how tight the auction range has been in recent months, and despite some notable moves over the past month, earlier today 10Y Treasury vol just hit a new all-time low.

The internals on today's auction showed that, just like yesterday, demand remains brisk for US duration, with the Bid to Cover of 2.34, above last month's 2.274 and in line with the 6 month average of 2.36. Indirects were also solid, taking down 61.7% of the auction, just below the 62.2% last month but above the 61.3% average; Directs took down 11.3%, the most since April, leaving 27.0% for Dealers who ended up with less than both last month's 29.7%, and the 6 month average of 27.6%.

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And as another week of Treasury issuance comes to a close, buyers have yet to represent any reluctance to buy US Treasurys despite a surge in issuance coming down the pipeline as the US budget deficit funding needs are set to soar. 

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