MBS LUNCH: 10 Year Treasury Auction Results
Here are what the charts looked like roughly 20 minutes ago:
It looked as if potential support might just be emerging. Having given the volatility a bit more time to play out, we have indeed encountered support, hopefully it's not temporary...
Reprices for the worse--if you haven't seen them already--are still possible to probable. Try to gauge how much your lender hedged their rates for today's auction though. If you were already .375 worse this AM, you may get no reprice to .25. The more aggressive rates were this AM, the closer to .5 and maybe even .625 a reprice might be.
Official auctions results are below and we'll dig into strategic discussion in the rest of the day's commentary.
The Treasury has successfully auctioned $25 billion 10-year notes.
The high yield was 3.692%, which was 3+ basis points lower than the 1pm "When Issued" yield.
The bid to cover ratio, a measure of auction demand, was 2.67 bids submitted for every one accepted by the Treasury. This compared to a 3.0 BTC in the last 10yr auction
Dealers took 53.3% vs. 53.2% last time
Direct Bidders took 12.9% of the issuance. Previously 17.2%
Indirect Bidders were awarded 51.2% of the auction, vs 52.9% last time.
Overall...Not a great auction.
Here are the results:
10-YEAR
NOTES
YIELDS
High 3.692 pct
Median 3.640 pct
Low 3.537 pct
PRICE/ACCEPTANCES
Price 99.443944
Accepted at
high 95.17 pct
Bid-to-cover ratio
2.67
AMOUNTS TENDERED AND ACCEPTED (dollars)
Total
accepted $25,000,006,500
Total
public bids tendered $66,838,081,500
Competitive bids
accepted $24,755,125,000
Noncompetitive bids
accepted $119,881,500
Fed
add-ons $125,000,000
Primary Dealer Tendered $46,900,000,000
Primary Dealer
Accepted 13,320,000,000
Primary Dealer Hit
Rate 28.4% of what they bid on vs 25.3% last time
Primary Dealer Total
Award 53.3% of total auction
Direct Bidder
Tendered 8,400,300,000
Direct Bidder
Accepted 3,775,300,000
Direct Bidder Hit
Rate 44.1% of what they bid on
Direct Bidder
Total Award 12.9 % of total auction
Indirect Bidder Tendered 12,404,200,000
Indirect Bidder Accepted 8,216,125,000
Indirect
Bidder Hit Rate 66.2% of what they bid on, VS. 52.9 last time
Indirect
Bidder Total Award 51.2% of total auction
NOTE
DETAILS
10-Year Note
CUSIP Number 912828MP2
Series B-2020
Issue Date February 16, 2010
Maturity Date February 15, 2020
Original Issue Date February 16, 2010
Dated Date February 15, 2010
Dutch auctions are also called uniform-price auctions. Successful bidders pay only the price of the lowest accepted bid, rather than the actual price they bid as in a multiple-price auction.