After a solid, but tailing, 3Y auction to start the FOMC week yesterday had little impact on the yield curve, moments ago the Treasury sold $39BN in 10Y paper in another solid auction, which however once again had no impact on the secondary market.  

The auction priced at a high yield of 4.175%, which was up from 4.068% in November and the highest since August. The high yield also priced on the screws with the When Issued which was also at 4.175%. It followed two tailing auctions but for the most part demand has been solid historically with most auction in the past year stopping through.

The bid to cover was solid up to 2.550 from 2.433 and the highest since September; it was also above the recent average 2.51.

Internals were also solid: Foreign buyers took down 70.2%, the highest since September, and above the six auction average of 69.5. And with Directs awarded 20.96%, down modestly from 22.55% in November but in line with the 20.52% recent average, Dealers were left holding 8.8%, the lowest since September.

Overall, this was a good auction with solid demand metrics. Yet in line of the continued hawkish retracement observed across the globe which has lifted yields sharply in recent days, the auction did little to boost rates sentiment and 10Y yields were unchanged in the second market trading around 4.17%, near the highest in three months.