4 Week Bill Auction Closes At 0.13%, Surge In Indirect Bidders As Primary Dealer Take Down Plunges
The US Treasury just auctioned off another $31 billion in 4 Week Bills. The auction closed at 0.13% high rate, with 93.14% allotted at the high. The high yield was the lowest seen since March 2010, and matched the April 27th auction. The Bid To Cover came in at a strong 4.51, compared to 3.87 previously. What was most notable was the explosion in Indirect Bidders in this auction compared to recent trends: indirects came in at 39.8% after taking down a mere 8.8% in last week's auction. The Indirect take down is the highest since March 23, when Indirects took down 43.4%. Oddly enough, the spike in Indirects was not at the expense of Directs, which at 16.3% was a little lower than recent take downs but still a far greater than the long term average. Oddly enough the Primary Dealer take down was just 43.9% - this is the lowest since the very first auction in 2010. Whether this has to do with quarter start asset rotation, or due to the massive SOMA take down of $6 billion, is unknown, but is certainly notable.