Unlike yesterday's 5 year bond auction, which priced at the lowest Bid To Cover since August, there were no major surprises during the just concluded issuance of $29 billion in 7 Year bonds [4]. The closing high yield was 1.59%, just as the When Issued predicted, which is the highest rate since October. The internals were more or less inline - Indirect takedown of 42.79% was the highest since August's 51.72%, Directs decline modestly from February's soaring 19.27%, to just 13.40%, which still was quite a bit higher than the TTM average 12.23%. Dealers were left with 43.81% of the auction, about 3% below their average. And while the market was sensing a weak auction ahead of the pricing, the subsequent favorable response in the Treasury complex has sent the entire curve tighter again, and money flowing out of stocks, which had hit an intraday high just before the auction completion. In other news, total US debt is now over $15.6 trillion.
[5]