本次拍卖的投标倍数为2.48，较9月的2.64大幅滑落，也低于最近6次拍卖的平均水平2.50。The US Department of the Treasury auctioned 10-year Treasury bonds with a bid yield of 4.066%, a significant increase from last month's 3.648%, and the bid-to-cover ratio was lower than the recent average. Unexpectedly strong overseas demand. Before the auction results were announced, the 10-year US Treasury yield rose to an intraday high of 4.07%, and after the results were announced, the yield remained largely unchanged.
On Wednesday, the US Treasury auctioned 10-year Treasury bonds with a winning bid yield of 4.066%, a significant increase from the previous month's 3.648%, and the winning bid yield in September was the lowest level since May 2023.
The pre-issued interest rate for this auction was 4.062%, 0.4 basis points lower than the final winning bid yield, indicating weak demand in the tail, which is a significant reversal from the 1.4 basis points higher pre-issued interest rate compared to the winning bid rate in the previous month's auction. However, the tail premium for this auction is far lower than the 3.1 basis points in August, not too bad.
The bid-to-cover ratio for this auction was 2.48, a significant decline from 2.64 in September, and lower than the average of the last 6 auctions at 2.50.
As an indicator of domestic demand in the USA, the allocation ratio of direct bidders, including hedge funds, retirement funds, mutual funds, insurance companies, banks, government institutions, and individuals, was only 8.4%, the lowest since November 2018.
As an indicator of overseas demand, the proportion allocated to Indirect Bidders, typically institutions like foreign central banks participating through primary dealers or brokers, was 77.6%, up from 76.1% last month and slightly below the historical high set in February 2023, when the allocation was close to 80%.
As the "last resort" to absorb all unsold supply, Primary dealers received a 13.9% allocation in this round.
Financial and economic blog Zerohedge commented that yesterday's lackluster closing of the 3-year Treasury auction was due to a significant erosion of confidence in the Fed's easing plans in recent weeks, resulting in a spike in Treasury yields and a sharp drop in foreign demand. However, the 10-year Treasury auction this time was peculiar, with robust overseas demand even approaching historical highs, yet other auction indicators were not favorable.
Before the results of the 10-year Treasury auction were announced, the yield on the 10-year Treasury note rose to an intraday high of 4.07%. After the auction results were revealed, the 10-year Treasury yield remained largely unchanged. Meanwhile, US stocks continued to rise, with the S&P 500 index hitting a new all-time high on Wednesday.
Editor/ping
