Treasury's $38 B 3-year auction was disappointing nearly all the way around
Treasury's $38 B 3-year auction was disappointing nearly all the way around, with the exception of the direct bid. It looks as though it got too pricey for itself. And there's also a lot of competition from other issues (bills and corporates). The note stopped at 2.248%, tailing out from the 2.241% at the deadline (the richest of the session). It compares to the 2.301% award rate from April and is the lowest since January 2018. There were nearly $94.2 B in bids for a 2.48 cover. That's even less than last month's 2.49 previously and the 2.60 average. Aside from the 2.44 cover from January, it's the weakest since April 2009. Direct bidders accepted 20.0%, better than the 18.7% from April and the 11.9% average. In fact, it's the strongest since September 2014. Indirect bidders were awarded 37.9%, below both the prior 42.7% and the 46.0% average, and is the lowest since December 2014. Primary dealers took 42.0% versus 38.6% in April.