After the delayed 5 Year auction took place 90 minutes ago, and priced strongly well through the When Issued, it was the turn of the last for this week auction of $29 billion in 7 Year paper, which just concluded and, somewhat surprisingly, was the worst of all auctions this week: not only did it tail modestly, pricing at 1.59%, a 0.4 bps tail wider than the 1.586% WI, but the Bid To Cover also was just modestly anove last month's 2.388, at 2.499, below the TTM average of 2.56. To be sure, a key factor for this superficial weakness was that the high yield of 1.59% was the lowest since May of 2013, as a result all those who have booked major profits in last month's auction pricing at 2.13 likely had far less of an incentive to get involved here.
The internals were also in line, with Directs taking down 14.9%, Indirects at 56%, above the 50% TTM, and Dealers left holding 29.04% of the auction, slightly less than the 35% average, which also is to be expected in a world in which banks can no longer turn around the flip the paper to the Fed if need be.
And with that this week's treasury issuance calendar is now complete.
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