Treasury Auctions Off $32 Billion In 3 Year Debt, Indirect Interest Drops, Total Debt Now At $14.297 Trillion

Tyler Durden's picture

Today the Treasury auctioned off $32 billion in 3 Year paper at a 1.28% high yield. The Bid To Cover was 3.25 with Primary Dealers and Directs once again responsible for two thirds of the auction, taking down 57.4% and 8.9% respectively. This was the lowest Direct Bidder purchase since 2009. The Primary Dealer hit ratio was a surprisingly high 25.8%. Indirects declined once again to a disturbing 33.7%, the third lowest since January 2009, and just betterthan the all time low February 2011 take down of 27.6%. Otherwise the auction was solid, coming about 5 bps inside of the When Issued. Keep an eye on CUSIP QC7: it will be the most monetized 3 year paper by the Fed over the next 2 weeks (recall the new POMO schedule is announced in under one hour). What is more important is that this latest addition takes total US debt (not the debt actually subject to the limit) once again to above the threshold: adding today's $32 billion to Friday's total of $14.265 trillion brings us to $14.297 trillion. And there is another $34 billion in auctions over the next two days. We are getting very, very close to where even the debt subject to the ceiling, which is about $50 billion lower than total debt, will be one auction away from breach.