In the same week which saw a dismal 2Y auction with the worst bid-to-cover in 11 years, and a whopper of a 5Y auction, moments ago the Treasury concluded its last coupon auction sale for the year, and the decade, in the form of a stellar auction of $32 billion in 7Y notes.
The sale stopped out at a high yield of 1.835%, stopping through 0.9bps the 1.844% When Issued, the biggest stop through since the 2.1bps in August.
The internals were quite solid, with the Bid to Cover rising from November's 2.442 to 2.466, the highest since September, and above the 2.38 six auction average.
The one modest disappointment today was the decline in the Indirect Bid, which slid from 69.6% to 59.4%, the lowest since August, if in line with the 60.9% recent average. And with Directs taking down a whopping 23.4%, more than double the 10.1% in November, and the highest since June's 24.2% (and well above the 15.9% six auction average), Dealers were left with just 17.1% of the takedown, the lowest since March.
Overall, this was a stellar auction if largely as a result of the huge stop through, and the thin bond market responded instantly, with both the 10Y and 30Y yields sliding near session lows in kneejerk response.