Record Big 30Y Auction Tails Despite Rebound In Foreign Demand

A record refunding week just concluded when the Treasury sold $27 billion in 30Y bonds – which as with this week’s 3Y and 10Y auctions, was the largest amount of 30Y paper ever sold by the US Treasury at one time.

The auction stopped at 1.680%, tailing the When Issued by 0.6bps, and the highest yield since February 2020. Curiously of the past 7 30Y auction, 5 have tailed.

The Bid to Cover of 2.292 was in line with recent auctions, and just below the 2.30 six-auction average.

The internals were better than this week’s previous coupon auctions: Indirects took down 61.9%, just below last month’s 62.0% and vastly better than the collapsing Indirect bid in the 3Y and 10Y auction earlier this week. And with Directs taking down 16.5%, Dealers were left holding 21.6% of the auction.

Altogether a mediocre auction, but at least foreigners came out in size, which is more than this week’s 3Y auction could say.