The Treasury just sold $8 billion of 20-year TIPS at what looks like a stinko
auction. The notes were sold at a yield of 2.5% versus pre
-auction talk for a yield of 2.37% (per Bloomberg
). The bid-to-cover ratio came in at 1.92, compared with an average of 1.98 for the past five sales. Indirect bidders bought 54% of the notes issued, below the five-auction average of 57.2%.
Long bond futures fell on the news, recently down 31/32 to a price of 128 20/32. Ten-year yields are up about 5 basis points. Next up: $40 billion in 2-year notes tomorrow and $30 billion in 5-years on the 29th