10 yr auction

The $19b reopening of the May 6th 10 yr auction was mixed as a higher than expected yield of 3.99% was needed to bring out the buyers where the bid to cover of 2.62 was the most since Sept ’07 and above the one yr average of about 2.30. The level of indirect bidders, mostly foreign buyers, totaled 34.2% which is the most since Nov and also above the one year average of 27%. Bottom line though, the higher yield needed to get this done is what the bond market is focused on and the reason for further selling after the auction.

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