Record High Directs, Record Low Dealers In Blockbuster 20Y Auction

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by Tyler Durden
Tuesday, Jun 15, 2021 - 01:41 PM

Coming several days after the trifecta of benchmark auctions when both the 10Y and 30Y auctions demonstrated solid demand despite a blistering hot CPI print, moments ago the Treasury sold another $24BN in 20Y paper in the form of a 19Y-11M reopening of Cusip SY5 which, too, was greeted with stellar demand.

The high yield of 2.12% was not only far below last month's 2.286% but was also the lowest since February's sub-2% auction; it also stopped 1.7bps through the When Issued, the biggest stop through since March's 2.0bps.

The bid to cover of 2.40 was also a solid improvement to the 2.24 in May and the 2.33 6-auction average, while the internals were perhaps the most impressive, with Indirects taking down 62.1%, the highest since October and far above the 58.0% recent average, and with Directs taking down 20.4%, or the most since the 20Y auction restarted in May, Dealers were left with just 17.5%, the lowest Dealers takedown on record.

Overall, a stellar 20Y auction which despite the lack of concession saw tremendous buyside demand.  Yet despite the blockbuster result there was barely a move in the curve, with the 10Y trading virtually unchanged from before the 1PM deadline.