It may not be as strong as yesterday's stellar 3Y auction, but today's 9-Year-11-Month reopening of cusip 6T2 was one of the strongest 10Y auctions in the past 3 years, with the high yield stopping at 2.13%, which while tailing the WI by 0.1bp, was the lowest yield for benchmark paper since November 2016, and 35bps below May's 2.479%.
The internals were also leaps and bounds better than the May 10Y which saw the Bid to Cover plunge to 2.17, the lowest since 2009, only to spike back to 2.49, the highest since April, and above the 6 auction average of 2.42.
And while foreign demand for today's offering wasn't quite as strong as for 3Y paper sold yesterday, the Indirect takedown of 65.6% was far above the 53.3% recorded in May; and with Directs taking down 13.6%, in line with recent auctions, Dealers were left with 20.8%, well below the 25.5% six auction average.
In total, a very solid auction and once again refuting fears that if yields drop low enough, demand will fade. So far, precisely the opposite has been observed.