The Unhappy 30-Year Treasury Auction

The closely-watched 30-year treasury re-opened bond auction today was, in John Jansen’s words, "sloppy"

The auction stopped at 4.009% vs a 100PM of  3.98%, so bidding was not
aggressive.

The bid/cover ratio was 2.37.  The YTD bid/cover has averaged 2.37, but has
averaged 2.63 since the June 1 change in auction bidding rules coming into
today’s auction.

For those of you not up on your treasury/Jansen/bond lingo, a quick primer:

• 100PM of 3.98%: the yield on the 30-year before the auction began. An increase into the auction is bad.
• Bid/cover: The ratio of bids received to bids accepted for bonds. Higher suggests more demand, etc. You want to look at averages rather than any individual bid/cover number.
• Re-opened: A previous issue for which more bonds were sold, rather than a new 30-year issue.

Check the rest of Jansen’s post here, as well as his always-savvy reader comments. it’s worth checking his end-of-day post too. Oh, just go read the whole damn site — John’s good.