After two subpar coupon auctions yesterday, which saw the sale of 2Y paper price at the lowest bid to cover since Dec 2008, moments ago the Treasury completed its coupon issuance for the day with the sale of $62 billion in 7Y paper in yet another disappointing auction despite the substantial concession into today's curvewide selloff.
While today's 7Y sale was nowhere near as ugly as the February monstrocity which sparked a sharp but brief market rout, the belly-busting auction stopped at a high yield of 1.332%, the highest since Jan 2020, and tailing the When Issued 1.324% by 0.8bps.
The bid to Cover dipped to 2.245 in August, the loeest since February and below the six-auction average of 2.31.
The internals were somewhat more solid, with Indirects taking down 60.1%, down from 61.1% last month but above the 58.9% six auction average. And with Directs taking down 20.9%, the most since June, Dealers were left holding 19.0% of the auction, the lowest since June.
Overall, not an ugly but not terrible auction, yet it was enough to push the 10Y back up by 1bp to 1.5322% in a day bond bull would rather forget.