TIPS auction bombs
The TIPS were sold at a yield of 2.449%, versus pre-sale expectations of 2.423%, according to Bloomberg. The bid-to-cover ratio, which measures the value of bids vs. the value of notes sold, was just 1.67, well off the 2.09 seen in the last auction in October and the worst in ANY auction since October 2002. Indirect bidder participation (seen as a proxy for participation by foreign central banks) was 41.8%, down from 54.4% at the last auction.
Treasuries are falling on the news, with the long bond recently down 19/32 in price. Yields, which move in the opposite direction of prices, are popping. Ten-year note yields recently hit 4.74%, the highest level since late October.