Largest Dealer Take Down Since June Saves Weak 30 Year Bond Auction
If yesterday's 10 Year auction was stellar, today's 30 Year was anything but. With the When Issued market getting slammed by the flight from equities, and down to 3.61%, the high yield was an unpleasant 2 bps tail at 3.630%, putting to question the recent strength in demand for duration. The internals were also on the flimsy side, with the Bid to Cover of 2.35 higher than last month's 2.27, but below the TTM average of 2.42. Directs took down 12.6% below the 15.5% average, Indirects had 38.8% of the allotment, while Dealers were left with 48.6%, the highest since June 2013, and well above the 44.5%. That said, despite today's weakness, should the market finally crash as it is long overdue to do following months if not years of blindly ignoring the newsflow, the current level on the 30 Year will seem like a bargin in the coming weeks when everyone and the kitchen sink rushes, as they tend to do, into the safety of Treasurys once more.
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