$21 Billion 10 Year Auction Closes At Fresh 2010 Low Yield, Indirects Surge To Highest In One Year
Today's $21 Billion 10 Year auction (technically a reopening of a 9 Year 11 Month Note, cusip NT3) closed at a fresh 2010 low yield, 2.67%, and the lowest since only January 2009's 2.419%. The Bid To Cover jumped from 3.04 to 3.21, in line since the 2010 average of 3.16. Yet the most notable observation, and confirming our expectation that Indirect bidders have a soft spot for the 10 Year, or frontrunning the Fed ever to the right on the curve, was the Indirect take down, which came at the highest number, or 54.7%, since September 2009. Direct Bidders plunged to the lowest since November 2009, which is expected: when every traditional player can't get enough of the auction, there is no need for the mysterious London bidder to emerge. Primary Dealers at 38.3% dropped to the lowest level since May 2010. The auction came in tight of the When Issued (2.685%), meaning there was a selloff into the auction, and now we are likely to see a pickup in bids for the 10 Year into the close, especially with an upcoming Obama address.