Strong Demand For 30Y Paper Shows No Shortage Of Buyers Amid Surge In Issuance

Following yesterday’s strong 3Y and 10Y auction in a day of supply deluge, moments ago the Treasury sold $13 Billion in 30Y paper in the latest strong auction, which stopped at a high yield of 3.109%, stopping through the when issued 3.114% by 0.5bps. The Bid to Cover also showed a marked improvement, rising from 2.26 to 2.38, if just below the 6 month auction average.

Once again, refuting the incorrect narrative that foreigners are shying away from Treasurys (just look at the record amount held in custody at the Fed), Indirects took down 57.9%, modestly below last month’s 61.2%, and in line with the 6 month average of 63%. Meanwhile, the Direct award jumped from 8.1% to 14.8%, the highest since October 2015, leaving Dealers holding 27.3%, below last month’s 30.8%.

In summary, another strong auction perhaps boosted by today’s growing risk sentiment and flight to safety.