Disastrous 5yr Auction Pushes Yields Higherđ
As the final nail in the coffin (for the day), the $52bln 5yr auction was terribly received, with a 1.9bp tail on a weak 2.36x bid-to-cover, the weakest since Sep 2022. The rest of the auction stats were terrible across the board, with dealers being left with the largest supply (19.4%) since September 2022, and indirect bids at a 2-sigma miss below average. The paucity of demand pushed yields another 2bp higher to see the yield curve close 10-15bp higher on the day, and spilling over to equity weakness for the rest of the afternoon. Investors will be focused on PCE later today (4% headline, 2.5% core) as the next challenging hurdle to surmount.
