US sells USD 19bln 10yr TIPS: Tail 1.6bps

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  • Tail: 1.6bps (prev. 2bps, six-auction average 1.4bps), WI: 1.880%
  • High Yield: 1.896% (prev. 1.940%, six-auction average 1.943%)
  • B/C: (prev. 2.38x, six-auction average 2.35x)
  • Dealer: 7.5% (prev. 12.2%, six-auction average 11.9%)
  • Direct: 24.0% (prev. 20.4%, six-auction average 23.7%)
  • Indirect: 68.5% (prev. 67.4%, six-auction average 64.4%)

Context

The latest auction of $19 billion in 10-year TIPS saw a 1.6 basis point tail, which is slightly lower than previous auctions, indicating a healthy demand. The bid-to-cover ratio decreased, suggesting some weakening in investor appetite, while indirect bidders remained strong, which may signal ongoing interest in inflation protection. This nuanced demand dynamic could influence expectations on yields and the broader fixed income and inflation narrative.

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