US Treasury sells $25B of 30Y Bonds with 2.1bp tail as demand weakens
The U.S. government sold $25 billion of 30-year bonds on Thursday at a higher-than-expected yield as investor demand showed signs of softening.
The long bond was awarded at a high yield of 4.813%, 2.1 basis points above the pre-auction, or when-issued, yield of 4.792%, marking a notable tail compared to recent auctions. This was, however, lower than the 4.889% stop-out rate at the previous reopening.
The bid-to-cover ratio, a key measure of demand, slipped to 2.27 from 2.38 at the prior auction.
Dealers, often representing buyers of last resort, represented 56.9% of submitted bids, direct bidders 14.1%, and indirect bidders 29.0%.
In actual takedowns, indirect bidders. often representing foreign central banks. took 59.5% of the issue, below their six-month average of 61.9%.
Direct bidders were awarded 23.0%, slightly under their 24.2% six-month average, while dealers absorbed a heavier-than-average 17.5% of the bonds compared to 13.9% historically.
Following the sale, 30-year bonds were quoted at 4.828%, climbing from pre-auction levels, as the market digested weaker demand for the long bond amid ongoing uncertainty about the outlook for inflation and Federal Reserve policy.
Source : Investing.com
