The Treasury has successfully auctioned $13 billion 30 year bonds. Four of the last five long bond auctions have been at this size, so the market is accustomed to this much 30 yr bond supply.

The bid to cover ratio, a measure of auction demand, was 2.73 bids submitted for every one accepted by the Treasury. This is well above both the ten auction average of 2.32 and the five auction average of 2.53 and the third highest 30 yr  bond auction turnout since 2008. Only last month's issuance and the September auction saw greater demand. (2.89 and 3.92 btc's respectively)

Bidding stopped out at a high yield of 4.770%...which was above the 1pm "when issued" bid.

Primary Dealers, aka the street, took 37.7% of the issue.  This is WELL BELOW the ten auction average of 44.5% and the five auction average of 49.0%. This is extremely low but a net positive as we do not want the street taking down too much debt because they will need to distribute unexpected supply to their accounts...and the market may force them to do so at lower prices and higher yields.

Direct bidders, aka domestic fund managers like Vanguard and PIMCO, were once again a HUGE SOURCE OF SUPPORT for the long bond, taking down 25.5% of the issue. This is WAY ABOVE the ten auction average of 9.6%  and the five auction average of 15.5% . This is the third consecutive 30 yr auction where direct bidders were aggressive bidders.

Indirect bidders were awarded 36.8% of the auction. This is close to both the five and ten auction averages of 36.9% and 35.5% respectively.  

Non-dealer accounts took down 62.3% of the auction. That is much better vs. recent averages and a sign of strong demand.

Plain and Simple: . While  the long bond auction didn't go as well as the previous three auctions of the week, but demand was still strong. Direct bidders continue to be a massive source of support (grabbing yield!)

Below is a recap of auction statistics.

$13 BILLION 30-YEAR BOND

YIELDS
High 4.770 pct
Median 4.728 pct
Low 4.650 pct
   
PRICE / ACCEPTANCES
Price 97.692939
Accepted at high 30.96
Bid-to-cover ratio 2.73
   
AMOUNTS TENDERED AND ACCEPTED (dollars)
Total accepted 13,951,661,800
Total public bids tendered 36,424,460,300
Competitive bids accepted 12,986,601,600
Noncompetitive bids accepted 13,408,700
Fed add-ons 951,651,500
   
Primary Dealer Tendered 21,535,400,100
Primary Dealer Accepted 4,893,032,000
Primary Dealer Hit Rate 22.7% of what they bid on
Primary Dealer Total Award 37.7% of total auction
   
Direct Bidder Tendered 5,791,000,000
Direct Bidder Accepted 3,308,597,600
Direct Bidder Hit Rate 57.1% of what they bid on
Direct Bidder Total Award 25.5% of total auction
   
Indirect Bidder Tendered 8,133,000,000
Indirect Bidder Accepted 4,784,972,000
Indirect Bidder Hit Rate 58.8% of what they bid on
Indirect Bidder Total Award 36.8% of total auction

The bond market is stuck at pre-auction levels while stocks continue to tick higher....

The 3.625% coupon bearing 10 year TSY note is -0-06 at 99-27 yielding 3.886%.

The FN 4.5 is -0-04 at 99-30 yielding 4.514%. The secondary market current coupon is 4.513%. The CC yield is +62.7bps/10yr TSY yields and +65.9bps/10yr IRS. MBS yield spreads are slightly tighter vs. TSYs and about unchanged vs. swaps.

REPRICES FOR THE WORSE HAVE BEEN REPORTED...but nothing widespread.

Overnight support is still holding up well in 10s...if that support gives way to selling,  you can expect the FN 4.5 to fall to 99-26 and more lenders to reprice for the worse.  Holding steady at intraday price lows/yield highs for now though...