Record High Directs, Record Low Dealers In Blockbuster 20Y Auction

Record High Directs, Record Low Dealers In Blockbuster 20Y Auction

Coming several days after the trifecta of benchmark auctions when both the 10Y and 30Y auctions demonstrated solid demand despite a blistering hot CPI print, moments ago the Treasury sold another $24BN in 20Y paper in the form of a 19Y-11M reopening of Cusip SY5 which, too, was greeted with stellar demand.

The high yield of 2.12% was not only far below last month’s 2.286% but was also the lowest since February’s sub-2% auction; it also stopped 1.7bps through the When Issued, the biggest stop through since March’s 2.0bps.

The bid to cover of 2.40 was also a solid improvement to the 2.24 in May and the 2.33 6-auction average, while the internals were perhaps the most impressive, with Indirects taking down 62.1%, the highest since October and far above the 58.0% recent average, and with Directs taking down 20.4%, or the most since the 20Y auction restarted in May, Dealers were left with just 17.5%, the lowest Dealers takedown on record.

Overall, a stellar 20Y auction which despite the lack of concession saw tremendous buyside demand.  Yet despite the blockbuster result there was barely a move in the curve, with the 10Y trading virtually unchanged from before the 1PM deadline.

Tyler Durden
Tue, 06/15/2021 – 13:41

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