Mediocre, Tailing 5Y Auction Prints At 7 Month Low Yield
If yesterday's 5Y auction saw blistering buyside demand, and was the first 5Y auction to avoid tailing in 2017, today's 7Y left much to be desired.
Printing with a high yield of 2.06%, the auction tailed modestly to the 2.058% When Issued, the first tail since September. This was the lowest yield on the 7Y tenor since October's 1.653%, and below the 6 auction average of 2.222%.
The Bid to Cover of 2.54 disappointed, printing below last month's 2.733, and also below the 6-auction average of 2.58.
Finally, the internals were also mixed, with Indirects taking down 61.2%, a steep drop from last month's record 81.7%, although the decline was offset by jump in Directs, which rose from 9.5% to 17.2%, 70% above the 6 month average of 10.7%, and leaving 21.6% to Dealers, just above the 18.3% 6MMA.
Overall, a mediocre auction and certainly a disappointment from yesterday's stellar 5 Year auction, although hardly a disaster, and as a result the curve is little changed after the auction.
Disclosure: None