Very good 30 yr auction after solid 10 yr, but dollar continues to break down

Because there is typically mostly 3 players in the 30 yr part of the yield curve, that being pension funds, insurance companies and those looking for the highest beta when betting on rates because of its long duration, I don’t pay as much attention to its auction results relative to the 10 yr but in light of everything going on, we have to take note.

The 30 yr bond auction was very good, following the great 10 yr yesterday and long yields are coming off their highs, though still up on the day. The yield of 4.813% was about 2.5 bps below the when issued pricing. The bid to cover of 2.43 though was only slightly above the 12 month average of 2.42. Direct and indirect bidders (I combine them because foreigners can use a US bank to buy at auction so it’s not clear who is a foreign buyer and who is not) totaled 88%, just above the one yr average of 85%.