Poor U.S. 30-year Treasury Long Bond Auction With Large 3.2 basis points Tail

The US Treasury 30-Year Bond Sale performed worse than expected, garnering a D- rating across the Fixed Interest desk. The tail was 3.2 basis points with WI level at time of the auction 1.863% and the high yield of 1.895% at the auction. The last auction came in at a high yield of 1.94% with a huge tail of 5.2 basis points. Follows a C- 10 year auction yesterday.

Heading into the auction the current 30 year bond traded at a rate of around 1.87%.

Auction Highlights

  • Duration: 30 Years
  • Amount:  $22 billion
  • High yield 1.518% (prev 1.94%)
  • WI level at time of auction 2.051%
  • Tail +3.2 basis points
  • Bid-Cover Ratio: 2.22x vs six month average of 2.29X
  • Direct Accepted: 18.5% vs six month average of 17.6%
  • Indirect Accepted: 60.8% vs six month average of 64.2.7%
  • Dealers 13.8% vs six month average of 19.6%

Auction grade: D-

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