Treasury's $32 B 7-year sale saw mixed, but decent results
Treasury's $32 B 7-year sale saw mixed, but decent results. It priced very well and garnered a strong direct bid. But the rich yield level left some potential buyers sidelined. As with the first two legs of the $113 B in sales, a rich yield level, along with some uncertainty over the FOMC's rate stance, as well as the outcome of the Trump-Xi talks, left some buyers sitting on their hands. The auction stopped at 1.889%, the lowest of the session, and pricing just through the 1.891% at the bid deadline. It's 25.5 bps below the May rate of 2.144%, and is the lowest since October 2016. There were nearly $78.1 B in bids for a 2.44 cover. That's a little better than the very poor 2.30 from last month (which was the worst since February 2016), but is still below the 2.50 average. Indirect bidders took 55.5%, also down from both the 58.3% from last month, as well as the 61.3% average. However, direct bidding remained strong, accepting 24.2%, more than double May's 11.3%, and considerably stronger than the 17.4% average. Indeed, along with the hefty take from November, January, and February, this is the best since March 2014. Primary dealers were awarded 20.3%, less than the 30.5% from May.