Treasury's $72 B 3- and 6-month bill auctions were poorly subscribed
Treasury's $72 B 3- and 6-month bill auctions were poorly subscribed and below average. Despite the risk adverse tone, it appears the bills are just too rich to garner much demand. Last week the bills may have also suffered from month-end book closings. The $36 B 3-month bill stopped at 2.300%, tailing slightly after richening to 2.295% at the bid deadline. The rate is fractionally below last week's 2.310% given the flight to safety trades over the past several sessions, and is the lowest since the same level at the October 22 sale. There were nearly $92.3 B in bids for a tepid 2.59 cover, below both the prior 3.15 and the 2.99 average. One has to go back to August to find a lower cover ($51 B auctioned). Indirect bidders accepted 34.0% versus 45.1% previously and the 46.0% average. It is the weakest since late January ($42 B sold). The $36 B 6-month was awarded at 2.255%, also tailing out from the 2.250% at the deadline, though it too is richer than last week's 2.320%. It's the lowest since August. Bids totaled almost $96.2 B for a 2.70 cover, below the 2.91 last week and the 3.04 average. It's the smallest since the first week in February. The indirect bid totaled 39.1%, weaker than the 41.9% previously and the 40.7% average.