本次拍卖的投标倍数为2.53，前次为2.70，当时创下2016年以来最高。On Tuesday, the USA Treasury auctioned 39 billion dollars of 10-year treasury bonds, and the auction results were disappointing, performing poorly according to several indicators.
On Tuesday morning, Eastern Time, US stocks faced a significant drop due to two strong economic indicators from the USA - JOLTS job openings and ISM services PMI. After the data was released, the US bond market plummeted, interest rates surged, and a few hours later, the auction of 10-year US Treasuries failed miserably.
The winning bid rate for this 10-year US Treasury auction was 4.680%, setting a new high since August 2007, significantly exceeding the previous winning bid rate of 4.235% from the auction on December 11. The pre-issue rate for this 10-year US Treasury was 4.678%, reflecting a tail spread of 0.2 basis points due to weak demand, the first occurrence of tail spread since October of last year.
The bid-to-cover ratio for this auction was 2.53, down from the previous 2.70, which had set a record high since 2016.
As an indicator of US domestic demand, including hedge funds, retirement funds, insurance companies, banks, government institutions, and individual direct bidders, the allocation ratio was only 8.4%, the lowest since November 2018.Mutual fundsThe allocation ratio for direct bidders, including Insurance companies, Banks, Government Institutions, and individuals, was 22.97%, marking the highest since November of last year.
As an indicator of overseas demand, the allocation ratio for indirect bidders, who participate in bidding through primary dealers or brokers by foreign central banks and other institutions, is 61.39%, a significant drop from the last 70.0%, marking the lowest since October 2023.
As the 'buyers' taking on all unsold supply, primary dealers have an allocation ratio of 15.6% in this round, reaching the highest level since August last year.
Financial blog Zerohedge commented:
This U.S. Treasury auction was terrible; although the market's reaction to the auction results was somewhat muted, this is only because the yield on the 10-year U.S. Treasury is currently at 4.70%, the highest level since April 2024, with only a higher yield seen in October 2023.
However, in October 2023, yields then quickly declined as concerns about a sharp slowdown in the U.S. economy emerged. Yet this time, the data shows almost no signs of weakness, at least before Trump assumed the White House, and it is likely that yields will rise significantly before inevitably declining.
