Selling In 30 Year Accelerates Post Weak Auction Carried 21.8% By Direct Bidders

[Ares]

The $16 billion 30 Year bond just came in at 4.49%, a 3 bps tail to WI. As a result the actual price is now dropping with the yield just pushing to 4.51%, a 9 bps intraday move. The actual auction came at a subdued 2.60 bid to cover, compared to the average of 2.62, and the last auction at 2.73. The reason why the auction was even passably successful: Direct Bidders once again carried it, this time taking down 21.8%, well more than double the historical average, although markedly less than the last auction where if it hadn't been for Directs we could have had something approaching the first failed auction. The primary dealer hit rate was 26.8%.

<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/summers/Direct%2030%20Y.jpg"/>

Here is the actual trading action before and after the 1 PM auction.

<img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/summers/30%20Y%20UST.jpg"/>

http://www.zerohedge.com/article/selling-30-year-accelerates-post-weak-auction-carried-218-direct-bidders