U.S. TREASURIES: Prices Push Higher on Solid Auction -10-Year 2.723%

U.S. Treasury prices got a bounce on an impressive $21 billion reopened 10-year auction, which saw solid demand across all measures and sent the 10-year into the leader position to slip to the 2.717% yield.

The high-yield came in at 2.729% when traders had been looking for a mid-range of 2.74%, indicating buyers were willing to take about one basis point less of a payout to hold the longer-term debt.

While the bid-to-cover saw investors ponying-up $2.92 for every $1 on offer, the strongest bid since last March against $2.54 last month, $2.68 in January and an average of $2.71 in 2013.

The breakdown saw primary dealers, banks that are required to bid at the auctions, were left to pick-up only a 29% slice of the sale. Indirect bidders, a proxy for foreign entities, came in for a standard sized 44.4%,while direct bidders, or domestic accounts, came in for a significantly higher 27.5%.

One long-time bond player noted that both ongoing geopolitical and global economic uncertainties (or “fear and global drama”) along with mid-term short-coverage helped suck bidders into the issue. The juxtaposition against Tuesday’s middling results for the three-year sale leads to him to believe Thursday’s $13 billion 30-year auction will see similarly strong results, although perhaps a little less impressive due to the much longer duration.

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