Treasury's $72 B 3- and 6-month bill auctions were mixed
Treasury's $72 B 3- and 6-month bill auctions were mixed. The shorter tranche continued to underperform, as it's done in recent weeks amid debt limit worries as October maturity dates intersect with the projected timeline when the Treasury runs out of borrowing authority. In contrast, the longer dated issue saw strong demand. The $36 B 3-month was awarded at 2.210%, tailing out badly versus the 2.180% at the bid deadline. And it's much cheaper than last week's 2.145%. There were almost $92.1 B in bids for a tepid 2.59 cover versus 2.66 previously and the 2.99 average. This cover ratio ties that from June 3, which was the weakest since August (when $51 B was auctioned). Indirect bidders took 42.8% versus 50.1% previously and the 45.3% average. The $36 B 6-month offering was awarded at 2.075%, through the 2.085% at the deadline. It too is measurably cheaper that last week's 2.040%. Bids totaled $105.1 B for a 2.95 cover, better than the 2.91 last week and just shy of the 2.98 average. It's the best since May 13. Indirect bidders accepted 52.8%, stronger than both the 51.3% previously and the 43.1% average. It's the highest since late April.