With the 10 yr yield at a 5 week high, the 10 yr note auction was mixed and uneventful. The yield of 1.739% was slightly above the when issued level but the bid to cover of 2.46 was a touch above the one year average of 2.43. Direct and indirect bidders took 75% of the auction, about in line with the previous 12 month average.
Bottom line, this continues a now long stretch of very mediocre treasury auctions in terms of demand. The 5 week high in yield today wasn’t enough to bring in more demand but we do have the ECB meeting tomorrow and the Fed next Wednesday so maybe the timing was an issue. Either way, yields are not responding much with the 10 yr yield at 1.73%, about where it was just prior to the auction results.