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Very Weak 10 Year Auction; Absence Of Bill Gross Means Lowest Directs Since August 2012

While today's just concluded 10 Year reopening of the August D36 Cusip priced at the lowest yield since last June when the first Taper Tantrum really flared out, or 2.381%, the underlying data was far weaker than meets the high yield eye, as this was a tail of a 1.4 bps to the 2.367% When Issued, the biggest tail in months, confirmed by the sliding Bid To Cover, which at 2.52, was also the lowest since last summer, or August's 2.44 to be specific. The ugly internals concluded the trifecta of adverse data, as Dealers were left holding 49% of the take down, the highest allotment since May of 2013 when Dealers were left holding 49.2%. Which meant that Indirects dropped from 53.0% to 44.4%, just below the TTM.

But the most surprising data point was the plunge in Directs, which tumbled from 13.5% to only 6.6%, which was the lowest since August of 2012 when they ended up with 5.2%. Just how much of this lack of Direct interest is due to Bill Gross no longer being on the bid? And what happens to future auctions in a world without the Old "New Normal" Pimco?