One month after the first 20Y auction in 34 years, the 20Y auction priced at a yield of 1.22% amid surprisingly strong demand. Moments ago, the Treasury sold its second batch of the recently restarted 20Y Treasury in the form of a $17 billion reopening of the original cusip (SR0), which priced at a high yield of 1.314%, which while higher than last month’s 1.22% yield was unexpectedly strong, stopping through the When Issued 1.329% by 1.5bps.
The auction metrics are as follows:
- Bid to Cover: 2.63x, compared to 2.53x in the inaugural auction last month
- Indirects: 61.6%, higher than last month’s 60.7%
- Directs: 16.5%, also well above May’s 14.7%
- Dealers: 21.9%, obviously lower than last month’s 24.6%
The 20Y Treasury appears at near the peak of the Treasury yield curve