Today's 4 week $26 billion auction closed at a 0.145% high rate, which, just like yesterday's 3 and 6 month Bills, was a lower rate than the preceding auctions, indicating that flattening pressures are once again receding. The auction bid to cover was a solid 4.35 a big jump from prior week's 2010 low of 3.56.
Indirect bidders dropped to a one month low at just 22.2%, as direct bidders (Fed, China, Hedge Funds, who knows) once again came in to save the day, taking down 17.2% of the auction. The hit rate on the Primary Dealer take down of 60.6%, was 17.2%. One thing is certain- direct bidders now play a just as important role in short-end auctions as indirect bidders.