Stellar 20Y Auction Stops Through, Highest Bid to Cover In Almost A Year

The week’s sole coupon auction just took place, and it was nothing short of a smashing success: in a day that saw yields first move higher only to slide lower, the US Treasury sold $13BN in 20Y paper to near record demand.

The auction priced at a high yield of 4.632%, down 20bps from 4.830% last month and the lowest since Oct 24; it also stopped through the When Issued 4.646 by 1.4bps, the biggest stop through going back to last June.

The bid to cover was an impressive 2.78, up sharply from 2.43 last month and the highest since April 2024; it was also one of the highest on record.

The internals were also very strong, with Indirects awarded 68.9%, up from 63.0% last month and above the recent average of 66.2%. And with Directs taking 22.4%, the highest since Sept 2023, Dealers were left holding just 8.8%, the lowest since July 2024.

Overall, this was a stellar auction and one of the strongest 20Y auctions in the past year, helping push yields in the secondary market to session lows.