If yesterday's 5 Year auction was a disaster, today's 7 Year was nothing short of stellar. While the High Yield printed roughly as expected, at 1.885, it stopped 0.2bps through the When Issued. Then it was the Bid to Cover which at 2.55 was the highest since November's 2.64. And then the internals were also impressive, with Indirect demand staying strong at 62.3%, just shy of last month's 62.6%, but it was the Dealers which surprised by tumbling to 23.7% or the lowest on record, as the Direct takedown picked up from 8.9% in September to 14.0% in October.
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Overall, with very strong demand for the belly of the curve, today's auction puts to rest any concerns about a buyers' strike.
