Stellar 7Y Treasury Auction Concludes Week's Issuance

Stellar 7Y Treasury Auction Concludes Week’s Issuance

After two stellar coupon auctions this week, when both the 2Y and 5Y saw record low dealer awards, moments ago the week’s auction cycle concluded with the sale of $50 billion in 7 Year paper in another stellar auction.

The high yield of today’s just concluded auction stopped at 1.905%, stopping through the When Issued 1.915% by 1 basis point. And while this was sharply higher compared to last month’s 1.769%, and the highest yield for the tenor since July 2019, it priced in a day when there has been a lot of market chaos, which helped boost demand for the safe haven.

The bid to cover of 2.364 was also solid, the highest since November, and well above the six-auction average of 2.304%.

The internals, while not nearly as impressive as the week’s prior two auctions, were still remarkable with Indirects awarded 63.85%, the most since December and one of the highest foreign bidder awards on record. And with Directs taking down 23.82%, the most since February 2019, Dealers were left holding just 12.32%, which while not a record low was the fourth lowest going back to 2009.

Overall, another impressively solid auction to close the week, no doubt bolstered by the general risk-off mood that has gripped the market now that the S&P500 is officially in a correction.

Tyler Durden
Thu, 02/24/2022 – 13:13

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