90 minutes an ugly 2Y auction this morning, moments ago the Treasury sold its second coupon offering for the day, this one $70BN in 5Y paper in an auction that was even uglier.

The high yield was 4.138%, up sharply from 3.519% in october and the highest since June. And with the When Issued trading at 4.122% at 1pm, the 5Y tailed 1.6bps, making this the 4th consecutive auction that has failed to stop through (last month was on the screws) and the second biggest tail of 2024, only January's 2bps tail was bigger.

The bid to cover was 2.39, effectively unchanged from the 2.38 last month and the lowest since June.

The internals were a perhaps the only silver lining: Indirects took down 76.4%, up from 70.3% and the highest on record (one wouldn't think that seeing the wide tail).

And with record Indirect bidders, Direct buyers were left with just 9.5% of the auction, the lowest since December 2018; while dealers were left holding 14.2%, just below the 6 auction average of 14.4%.

Bottom line, this was an odd auction, one where award for foreign bidders was the highest on record, yet where pricing into the auction was ugly, and helped push the 10Y yield back to just shy of 4.30%, a level where stock will surely start feeling the pressure of the rapid tightening in financial conditions.