Treasury’s $25 billion 4-week bill sale was well received, even as it competed with a $40 billion 123-day cash management bill. The flight to safety action that’s dominating the trade today was supportive. The auction stopped at 0.960%, through the 0.965% at the bid deadline. That a little cheaper compared to last week’s 0.940% rate.
There were $85.4 billion in bids for a 3.42 cover. That’s well up on the 3.06 last week, and the 3.08 average. In fact, it is the highest going back to the 3.81 from March 7, when the debt limit last threatened (it was to be re-instituted on March 15). However, much of the strength in the cover was a function of the $5 billion cut in size. Indirect bidders took 23.8% and direct bidders took 6%, up modestly from 20.2% and 5.3%, respectively, last week. Dealers were left with 70% compared to 74% last week.
The $40 billion 123-day cash management bill (CMB) went off at 1.060% and garnered a 3.04 cover, down from the last CMB in July, though that sale totaled only $20 billion. Indirect bidders took 24.3% versus 13.9% previously.
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