30 Year Bond Auction Results and Market Reaction

The Treasury just auctioned $13 billion 30 year bonds. This was the best auction of the week. Read "best" as "not as bad as the 3-year and 10-year auction turnouts".

The bid to cover ratio, a measure of auction demand, was 2.89 bids submitted for every 1 accepted by the Treasury. This is above average and the highest BTC ratio since September 2009.

39% of the reopening was awarded at the high yield, which stopped at 4.08%, below the 1pm "When Issued" bid side yield.

Direct bidder participation fell off significantly (16.1% award vs. 20.3% previous) but indirect buyers showed up to support the auction, taking home an above average 37.4% of the issue. Completing the hat trick were primary dealers who were once again forced to carry a larger portion of inventory than usual...mostly thanks to a lack of interest from direct accounts.

I gather the uptick in indirect buyer demand was a factor of cheapening rate levels. Thank you real money accounts...

After the auction/Ahead of the FOMC minutes, traders are acting as if they expect to see bearish Fed outlooks in the FOMC minutes.

Stocks, which retested 1086 early in the day, are heading back toward another test of 1086.

The benchmark 10yr note is closing in on its low yield of the day.

Rate Sheet Influential MBS prices are just off their high print of the session.

These FOMC minutes should call attention to a general slowdown/economic downgrade as well as a long term, slow macroeconomic recovery.