Record-Breaking 30Y Auction Sees Huge Stop Through, 2nd Highest Foreign Demand On Record

One day after a blowout 10Y auction, which saw massive buyside demand thanks to the surge in yields earlier after the Bessent buyback disappointed which led to a huge concession into yesterday';s 10Y auction, moments ago we got the week's final coupon auctio when the Treasury sold $22BN in 30Y paper in an auction that was on the verge of blowing away many records.

Starting at the top, the auction priced at a high yield of 5.308%, up from 5.212% in August and the 5th consecutive 30Y auction pricing above 5%. It was also the highest yield going back all the way to August 2001. Just as notably, the auction stopped through the When Issued 5.335% by a whopping 2.7bps, the second highest stop through on record!

The bid to cover was likely impressive, surging to 2.612 from 2.392, the highest going back to February. 

The internals were even more impressive: Indirects were awarded a whopping 79.5%, up from 66.9% in August and the second highest on record (only Oct 2024 was higher).

And with Directs roughly in line at 18.3%, down from 21.6% (and below the 22.1% recent average), Dealers were left holding just 2.21%, down from 11.51%, and the lowest on record by a huge margin.

Overall, this was not only a stellar auction, but was perhaps the 2nd strongest 30Y auction on record. And yet, while yields across the curve did dip after the blockbuster auction results hit, the selloff has promptly resumed and 10Y yields are once again pushing wider, set to take out a new multi-year high as they near Bessent's red line of 5.00%