$16 Billion 30 Year Auction Prices At 3.82%, 2.73 Bid To Cover, Primary Dealer Take Down Surges
Today's auction of $16 billion in 30 Year Bonds came more or less as expected, printing at a near record low 3.82%, highest only compared to the 3.5-3.6% yields achieved in February and March of 2009. The Bid To Cover was 2.73, a decline from recent prints, yet the biggest surprise was the surge in the Primary Dealer takedown, which at 55.6% was the highest since October 2009. In essence the Primary Dealers carried nearly 60% of the auction (and we all know that the PDs are nothing but the Fed lite). The other surprise - direct bidders represented just 8.3% of the take down: this was the lowest since February, even as Indirects were responsible for just 36.1% of the auction. This once again confirms that starving for yield foreigners like the curve, but not so much to bet on inflation staying low in 30 Years.