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Record Foreign Demand For Blowout 30Y Treasury Auction Sends Yields Tumbling Across The Curve

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Record Foreign Demand For Blowout 30Y Treasury Auction Sends Yields Tumbling Across The Curve

What a blowout auction.

After a stellar 3Y, an impressive 10Y (both of which came in far stronger than expected, prompting us to correctly say there were zero jitters about today's CPI print in the bond market), moments ago we got an absolutely blowout, record 30Y auction.

The high yield of 3.585% was fractionally above last month's 3.513%, but stopped through the When Issued by 2.4bps, one of the biggest stop throughs on record which was especially remarkable when considering the powerful rally across the curve going into the auction and lack of concession as the curve had tried to steepen on several occasions, and failed.

Th Bid to Cover of 2.451 was well above last month's 2.249 and was the highest going back all the way to September 2021.

But it was the internals that were blowout, with foreign buyers, or Indirect bidders including central banks, private investors and sov wealth units, awarded a record 74.63%, the highest on record (and far above last momth's 61.57%) as foreigners just couldn't get enough.

And with Directs taking down 16.03%, below the recent average of 19.0%, Dealers were left holding just 9.04% of the auction, the lowest amount on record.

And yes, news of the huge demand has sent yields across the curve, and certainly at the all important 10Y tenor, sharply lower.

Bottom line: this was a blowout 30Y auction, with one of the biggest stop throughs on record, and one setting new records for both Indirect and Dealer awards. 

Tyler Durden Thu, 01/12/2023 - 13:21

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