If yesterday"s 5Y auction saw blistering buyside demand, and was the first 5Y auction to avoid tailing in 2017, today"s 7Y left much to be desired.
Printing with a high yield of 2.06%, the auction tailed modestly to the 2.058% When Issued, the first tail since September. This was the lowest yield on the 7Y tenor since October"s 1.653%, and below the 6 auction average of 2.222%.
The Bid to Cover of 2.54 disappointed, printing below last month"s 2.733, and also below the 6-auction average of 2.58.
Finally, the internals were also mixed, with Indirects taking down 61.2%, a steep drop from last month"s record 81.7%, although the decline was offset by jump in Directs, which rose from 9.5% to 17.2%, 70% above the 6 month average of 10.7%, and leaving 21.6% to Dealers, just above the 18.3% 6MMA.
Overall, a mediocre auction and certainly a disappointment from yesterday"s stellar 5 Year auction, although hardly a disaster, and as a result the curve is little changed after the auction.
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