Monday, January 17, 2022
HomePoliticsAmerican PoliticsForeign Demand For 5Y Paper Jumps Despite Sizable Tail

Foreign Demand For 5Y Paper Jumps Despite Sizable Tail

One day {following a} mixed 2Y auction {noticed} a ominously large tail {the} 2nd highest indirect bid on record, moments ago the Treasury sold $57 billion in 5Y paper {within an} auction {that has been} curiously {much like} yesterday’s.

{Beginning} {at the very top}, the high yield {of just one} 1.263% tailed the When Issued 1.259% by 0.4bps, {the next} highest tail since February with only November’s 1 basis point bigger. {So even,} {the yield was {the very first time} we {noticed} a sequential decline since July,|since July the yield {has been|had been} {the very first time} we {noticed} a sequential decline,} with December’s high yield printing 5.6bps below November’s 1.319%.

{Considering} the bid to cover, {things got better decidedly,} {because the} ratio rose from 2.34 to 2.41, {the next} highest since May and above {the two} 2.39 six-auction average.

However, like yesterday’s 2Y auction, the Internals {had been} {most remarkable}, with the Indirect {remove} {bouncing|leaping} from 56.9% to 65.7%, {{the best} since August 2020,|since August 2020 {the best},} {even though} not nearly as {amazing} as yesterday’s 2nd highest Indirect takedown on record (in Monday’s 2Y auction note), today’s foreign demand was {one among} {the best} in recent history.

Overall, however, {{the outcomes} were mixed {because the} auction both tailed while also telegraphing solid foreign demand,|{the outcomes} were mixed {because the} auction both tailed while telegraphing solid foreign demand also,} {and for that reason} {there is} barely any reaction in the rates market {where in fact the} 10Y has {already been} virtually unchanged before and {following the} auction, {trading around 1 {just|simply}.}465%.

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