Treasury's $87 B 3- and 6-month bill auctions were mixed
Treasury's $87 B 3- and 6-month bill auctions were mixed with the shorter tranche underpeforming and the longer bill close to average. While demand was partly encumbered by low award rates, the 3-month was also weakened by the $3 B increase in size. The $45 B 3-month stopped at 1.900%, tailing out versus the 1.880% at the bid deadline. But it's 6 bps rich to last week's 1.960%, and is the lowest since June 2018. There were $111.8 B in bids for a 2.51 cover, weaker than the prior 2.99 and the 2.90 average. But it was encumbered by the rich award rate and the $3 B increase in size (largest since April 1). Nevertheless, it's the weakest since December 2008. Indirect bidders took only 21.6%, less than half of last week's 47.0% and the 47.3% average. It ties October for the lowest since December 2017. The $42 B 6-month offering was awarded at 1.840%, also tailing from the 1.830% at the deadline. And it's 5 bps below last week's 1.890%, though it is the lowest since March 2018. Bids totaled $118.9 B for a 2.86 cover, below last week's solid 3.06, but right in line with the 2.86 average. Indirect bidders accepted 50.5%, fractionally below the prior 51.8%, but stronger than the 42.6% average.