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Strong 30 Year Auction Sees Second Highest Ever Allotment To Foreign Central Banks

After one poor (the 3Y), and one stellar (the 10Y) auction earlier this week, today the Treasury concluded the weekly issuance with the sale of $16 billion in 30 Year paper. The auction priced moments ago at a high yield (95.55% allotted) of 3.07%, pricing 1 bps through the When Issued, and the highest since July when the market was again convinced a rate hike is imminent only to get the rug yanked from under its feet.

The internals were mixed with the Bid to Cover sliding from 2.460 to 2.409, which however was above the 12 TTM average of 2.356. Offsetting the slightly weaker BtC print was the jump in Indirects, which rose from 56.4% to 60.3% the second highest on record, as foreign central bankers have again decided that the safety of US paper offsets the duration risk of holding it in a rate hike environment.

Directs dipped modestly from 15.5% to 10.2%, below the TTM, while led to a small increase in the Dealer takedown which rose from 28.1% to 29.6%.

Overall, a strong auction as can be seen by the drop in yields across the curve after the auction, but mostly on the long-end.