TreasurySells $29 BillionIn 7 YearPaperWithRecordDirectBid
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In the last of this week’s auctions, the Treasury just sold another $29 billionin 7 Yearpaper, which priced through the When Issued 1.873%, at 1.870%, the lowest yield since May, and at a Bid to Cover of 2.66, substantially higher than the 2.46 in September, and above the trailing twelve month average yield of 2.61%, once again reversing the recent trend in declining BTCs seen recently in both the 2 and the 5 Year auctions. And while the auction was largely non-remarkable, where it stood apart was that the Direct take down of 23.93% was the highest in history, with Indirects taking down 42.30%, above the 12M average of 42.3%, and the remaining 33.77% – the lowest since December 2010 – left to the Dealers, which will promptly flip this particular CUSIP WC0 back to the Fed.

And now, all eyes on the Fed, who will promise to continue monetizing as much 7 Year paper as the Treasury has the good grace of issuing.

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