$24 Billion 10 Year Prices At 2.636%, Bid To Cover Drops, Indirects Surge To Record
Today's $24 Billion 10 Year auction priced at 2.636%, a yield that just like all other auctions recently has moved higher than recent record pricings. Yet not all was well: the Bid To Cover dropped from October's 2.99 to a 9 month low of 2.80, the lowest since February's 2.67. Yet what is arguably the most interesting aspect of the auction was that Indirect participation surged to what appears to be a record high of 56.6%, pushing out the Primary Dealers (34%) and Direct bidders (9.4%). If last night's rocket launch was indeed there to send a message to Asia, it certainly succeeded. And now all the eyes turn to the 30 Year tomorrow, whose yield continues to go higher with every day, as the New York Fed will soon be forced to announce that it will be bidding up the long-end as well or risk losing all control over LT inflation expectations.