There was solid demand for today’s $27 billion in 20Y notes, which came in well stronger then the recent 30Y auction, a surprise to some with the Fed’s Minutes due in just an hour.
Stopping at a high yield of 1.85%, the auction came on the screw with the When Issued which was also trading a 1.85% at 1pm; the high yield was a drop from last month’s 1.89% and the lowest since January’s 1.643%.
The bid to cover of 2.44 was also an improvement from last month’s 2.33, and the highest since March’s 2.51.
Finally, the internals is where today’s auction really shone because with an Indirect award of 62.3%, this was the highest demand among foreign buyers going all the way back to October 2020. And with Directs taking down 18.7%, in line with recent auction, Dealers were left holding 19.0% of the auction, below last month’s 20.9%, and below the six-auction average of 22.3%.
Overall, a solid auction suggesting no nervous traders ahead of today’s FOMC Minutes.