30Y Bond Auction

12 May

Disappointing. Jun 30y futures sold off hard right after the auction, recovering slightly. Going into the auction 30y cash was around 4.29/30.

30Y Auction – Yield: 4.38 vs. 4.531 previous (4/14), Indirects 33.03 vs. 47.20, BTC 2.43 vs. 2.83, Coupon: 4.375 vs. 4.75

Why is the auction disappointing (in my eyes)?

  1. Indirects were sorely lacking in this one. 33.03 well below the last 10 average of 40.85
  2. Bid To Cover was significantly weaker at 2.43 vs. last 10 of 2.69.

I’m sure there are other factors, but those two factors were ones that really stuck out to me at the time.

Updated: Auction Stats and updated issuance calendar/amounts for next week’s auctions [GDocs]

Have a great day.

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