Treasury's $34 B 3-year auction was on the soft side
Treasury's $34 B 3-year auction was on the soft side. The offering stopped at 2.765%, tailing fractionally versus the 2.763% rate at the bid deadline. It's also cheaper than the 2.685% award rate in July and in fact is the highest going back to 2007. There were $90.1 B in bids for a 2.65 cover, up a bit from 2.51 last month (which was the weakest since 2009) but is well below the 2.88 average. However, increased auction sizes (today's is the largest since 2010) have been partly responsible for the flagging cover ratio. Indirect bidders accepted 42.7%, also better than the poor 39.6% last month (the lowest since 2014), but is below the 51.3% average. Direct bidders took 12.1%, about the best statistic of the auction, versus 9.1%. Primary dealers accepted 45.2% from 51.3%.