Stellar 30Y Auction Sees Record Low Dealer Award, Biggest Stop-Through In 6 Years

Stellar 30Y Auction Sees Record Low Dealer Award, Biggest Stop-Through In 6 Years

One day after the ugliest 10Y auction in a long time, which tailed the most in 6 years, today we got a mirror-image, when moments ago the Treasury sold the final refunding auction of the week when it placed $21 billion in 30 year paper (Cusip TL2) at a high yield of 4.080%. While this was the highest yield since July 2011 and was well above last month’s 3.930%, the auction stopped through the When Issued 4.113% by 3.3bps. This was the biggest stop through since at least 2016 so yes, a mirror image of yesterday’s tailing 10Y which also was a six-year outlier, only in the opposite side as it tailed by a similar amount.

The bid to cover of 2.422 was well above last month’s 2.386 and was also the highest since July.

The internals were remarkable, if not for the solid Indirect award, which at 69.93% was above last month’s 69.13% but below the six-auction average, but the Dealer takedown, which at 20.4% was one of the highest on record. And, by extension, since less than 10% was left away from the buyside, the Dealers takedown of 9.69% was the lowest on record!

While the stellar auction was somewhat surprising, coming at a time when yields had already seen one of the biggest drop on record, but with inflation seemingly topping out and the US crashing into a recession, one can explain why everyone was desperate to get a piece of 30Y paper if indeed today was the turning point.

Tyler Durden
Thu, 11/10/2022 – 13:20

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