Ugly, Tailing 7Y Auction Pushes Yields Higher
After two solid auctions earlier this week ahead of the Fed which many rates experts predicted would tail (neither did), few were too concerned about today’s sale of $62BN in 7Y paper. Well, maybe they should have because while today’s auction was certainly better than the catastrophic, “failed” 7Y auction in February it was the ugliest in many months.
Stopping at a high yield of 1.050%, the auction priced well below last month’s 1.264%, however the tail of 1bps to the When Issued 1.040% was the biggest since March.