$42B Treasury Auction Sees High Demand, Bullish Outlook

The $42 billion 10-year bond offering today saw a slight tail, with a yield of 4.483% versus 4.473% at 1pm NYT. Primary dealers took 15.7%, lower than the average of 16.9% over the past six months. Indirects received 65.5%, the highest since February, while directs got 18.7%, the most since January.
Despite the tail in the auction, which was only 1bps, it is not significant enough to disrupt the bullish outlook for Treasuries. The setup for Thursday's $25 billion long-bond supply can now begin.
This week's auctions of 3s, 10s, and 30s are seen as a minor headwind to the repricing that started last week, with market focus shifting to the upcoming long-bond sale.