The U.S. Treasury auctions off $39 billion of 10 year notes at a high yield of
- High yield 4.173% vs 4.169% last
- WI level at the time of the auction 4.181%
- Tail -0.7 basis points vs 6 month average of 0.1 basis points
- Bid to cover 2.55X vs 6 month average of 2.51X
- Directs 24.5% vs 6 month average of 20.6%
- Indirects 69.6% vs 6 month average of 69.5%
- Dealer 5.9% vs 6 month average of 9.9%
AUCTION GRADE: B+
The $39B 10-year Treasury auction showed solid, stress-free demand, with the issue stopping 0.7 bp through the WI, signaling buyers were willing to accept a lower yield than the market was offering going into the sale. The 2.55 bid-to-cover was slightly above average, confirming broad participation, while direct bidders jumped to 24.5%, highlighting strong domestic real-money demand from pensions and asset managers. Foreign demand was steady, and dealers were left with only 5.9% of the issue, meaning the market absorbed the supply cleanly without forcing the Street to warehouse bonds. Together, it pointed to a healthy, well-supported auction and helps explain why yields struggled to move higher afterward
