$35 Billion 5 Year Auction Prices At 1.33%, 2.82 Bid To Cover - No Records Here

Today we had a second consecutive auction whose yield was not a record: the $35 billion 5 Year auction just priced at 1.33%, compared to 1.26% last month. This represented a 1.1 bps tail. The consecutive sequence of auctions that has come at an end, across the entire curve is now over. The Bid To Cover was also slightly worse than before, coming at 2.82, the lowest since June 2010. And another metric which was weakest (or strongest, depending on how one looks at it), was the Primary Dealer participation, which at 48.8% was the highest since June, while the Direct Bidder take down of 11.7% was the highest since May's 15%. This leaves just 39.5% for true Indirect bidders. Tomorrow is the latest auction in the belly, a $29 billion 7 Year, which will also come at less than a record result now that the grayish swanish curveshift wider is starting. Whether or not this means the end of the great IG/HY bull bond market, in addition to just the 30 year, is as of yet unceratain.


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