Almost as if by design, moments ago today's 10 Year reopening [4](Cusip WJ5) priced at 2.648%, above May's 2.61%, and some 0.9 bps above the When Issued 2.639% driven by a big drop off in Indirect demand. The Bid to Cover was actually a stable 2.88 the highest since March, and well above the 2.65 average in the past year which likely was the result of the higher than expected high yield. But it was the internals where the action was with Indirect demand tumbling from 49.3% to 36.1%, the lowest since May, while Directs were relatively flat at 19.%, down from 21.6%, as Dealers had to pick up their buying and take down some 44.5% of the auction: the most also since May 2013. And with everyone paying attention to bonds, the curve was certainly not happy with the weakness in today's much watched benchmark auction, with the kneejerk reaction certainly indicating more weakness may be in store for the bond complex.
Bonds reacted negatively (as expected) to the tail but remain unch on the day...
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