Solid 30 yr bond auction

The 30 yr bond auction, which typically has its own unique characteristics in terms of supply and demand because of the players involved on that end of the yield curve, was solid. The yield of 4.608% was below the when issued pricing of 4.63%. The bid to cover of 2.64 was well above the previous one year average of 2.39. Also, direct and indirect bidders consumed 90% of the auction, the most since June 2023.

Bottom line, helped by the highest 30 yr yield since early July the buyers responded positively to this 30 yr offering. Note in the chart below, the one year low in yields was on September 16th, the day before the 50 bps rate cut. While yields are still sharply higher today, they are a bit off the intraday highs in response.