The Treasury has successfully auctioned $16 billion 30 year bonds. The high yield was 4.72%, this is 2 basis points higher than the "when issued" yield at the 1pm bid deadline. The bid to cover, a measure of auction demand, was 1 bid accepted for every 2.36 submitted. This is low demand relative to the January auction when the bid to cover ratio was 2.68% and worse than the five auction average of 2.54%.

Dealers were awarded 47.3% of the auction, this is lower than the five auction average of 51.9%.

Direct bidders were awarded 24.0% of the auction, this is much higher than the five auction average of 6.88%

Indirect bidders were awarded 28.5% of the issue, this is much lower than the five auction average of 41.2%

This was the largest award percentage for direct bidders ever recorded and the lowest award percentage for indirect bidders since November 2008.

Here is a recap of the results:

    High           4.720 pct
    Median      4.640 pct
    Low            4.536 pct

    Price                           98.483611
    Accepted at high      61.57 pct
    Bid-to-cover ratio      2.36

    Total accepted                              16,000,007,000
    Total public bids tendered          37,758,111,300
    Competitive bids accepted        15,980,095,700
    Noncompetitive bids accepted  19,911,300
    Fed add-ons                                  1,796,768,900

    Primary Dealer Tendered        25,232,000,000
    Primary Dealer Accepted         7,573,590,500
    Primary Dealer Hit Rate           30.0% of what they bid on 
    Primary Dealer Total Award    47.3% of total auction

    Direct Bidder Tendered          5,918,250,000
    Direct Bidder Accepted          3,847,481,400
    Direct Bidder Hit Rate            65.0% of what they bid on
    Direct Bidder Total Award      24.0 % of total auction    

    Indirect Bidder Tendered       6,587,950,000
    Indirect Bidder Accepted        4,559,023,800
    Indirect Bidder Hit Rate          69.2% of what they bid on
    Indirect Bidder Total Award   28.5% of total auction

The instant reaction in the bond market was a choppy one. 10s moved up as far as 3.76% ....the 3.625 coupon bearing 10 yr note now sits at 3.742%.

The FN 4.5 has actually improved and is currently unchanged on the day at 100-19.

The bond market was clearly not interested in this auction.  Rates weakness persists as we are holding outside the comfy confines of the recent range. A reprice alert has been avoided for now..