After two dismal coupon auctions to start the week, and the year, the final sale of Treasury paper in the funeral-shortened week took place shortly after 1pm when the Treasury sold $22BN in a 29 Year, 10 Month reopening, in what was the strongest auction so far in 2025.

Stopping at a high yield of 4.913%, not only was this sharply above last month's 4.535%, but it was also the highest yield since August 2007. The silver lining: the auction stopped through the When issued 4.920% by 0.7bps, following last month's tail.

The bid to cover was a solid 2.519, higher than last month's 2.390 and above the six auction average of 2.42.

The internals were average, with Indirects awarded 66.6%, just barely above last month's 66.5%, and below the recent average of 67.4%; and with Directs awarded 20.7%, or above the December 19.1%, and just above the recent average, Dealers were left holding 12.7%, down from both the December 14.4% and the recent average of 14.6%.

Overall, this was a mediocre auction, one which sent the 10Y yield spiking 4bps higher and once again approaching session highs which - as we now know - lead to an increasingly violent selloff in the stock market.