Treasury's $16 B 30-year reopening was disappointing
Treasury's $16 B 30-year reopening was disappointing, and suffered from still rich yield levels, and the numerous machinations in the market, including solid risk-on flows. The auction tailed out 2 bps to 2.270%. Trading was pretty sloppy through the morning amid positioning around the ECB, and the stronger CPI and claims data. After dropping sharply on the ECB's stimulus, yields cheapened into the afternoon. Just ahead of the bid deadline the rate fell from 2.260% to 2.254%, before being awarded a 2.270%. That's 6.5 bps below the 2.335% for the $19 B August new issue and it's the richest since July 2016. However, the coupon remains at 2.250% from August. There were $35.5 B in bids for a weak 2.22 cover, below the tepid 2.24 from last month (even with the reduced size) and the 2.25 average. There were several cover ratios this year that were slightly lower, with the 2.13 from July the lowest since the 2.06 from December 2018 (which was the worst since February 2009). Indirect bidders accepted 60.3%, fractionally softer than the 61.3% from August, but slightly better than the 59.7% average. Direct bidders accepted 13.3%, above last month's 12.5% and the 12.9% average. Primary dealers were awarded 26.4% versus 26.1% previously and the 27.3% average. The Treasury's auctions were't too successful this week, but at least they are behind us.