30-Year Treasury Auction Meets Solid Demand

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The United States Treasury’s 30-Year Treasury Bond auction just went off and the results were looking a bit better than we would have been expecting even this morning. We had noted that 10-year Treasury yields were back around 2.05% and riding multi-month highs, but now those are back at the 2.0% mark. The 30-year long bond yield was even up at 3.23% earlier this morning.

Today brought the 3.125% February 15, 2043 bond maturity out at a yield of 3.18%, with 85.2% of bids coming in at the high yield. The price per bond was $98.94168 for $16 billion in this auction.

The bid-to-cover was 2.74 as the Treasury had bids of $43.855 billion, slightly higher than the average of about 2.62. Some 36.4% of accepted bids were indirect bids. Primary dealers took almost half of this auction bidding for their own house accounts. Those indirect bids are considered to be customers placing competitive bids through a direct submitter, including Foreign and International Monetary Authorities placing bids through the Federal Reserve Bank of New York.

Rick Santelli on CNBC just gave this auction a grade of “B+” and we would tend to agree. The only issue we have with the grade is that the auction results were strong enough that they may have put in a temporary cap in long-term rates since they have risen handily off of the 2012 lows.

FULL AUCTION RESULT

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