10 year note auction

The reopening of the 10 year note auction was solid as the yield was 4 bps lower than where the when issued was trading and the bid to cover of 3.28 was well above the one year average of 2.31 and at the highest level since at least 1994. This also comes in the context of yields being 60 bps lower than the June reopening auction, thus not dissuading the buyers. The rollover in the stock market and large drop in commodity prices certainly brought out the buyers as risk aversion trumped inflation concerns, $ weakness, government finances and quantitative easing.

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