US sells USD 21bln of 10yr TIPS; tails 2bps

• High Yield: 1.940% (prev. 1.734%); WI: 1.960%.
• Tail: 2bps (prev. 5bps)
• B/C: 2.38x (prev. 2.20x)
• Dealer: 12.2% (prev. 17.8%)
• Direct: 20.4% (prev. 26.1%
• Indirect: 67.42% (prev. 56.1%)

The recent 10-year TIPS auction saw a high yield of 1.940%, which is notably above the previous auction level, indicating a rising cost for inflation protection. The 2bps tail, down from 5bps, suggests improved demand relative to prior auctions, as evidenced by the bid-to-cover ratio of 2.38x, indicating robust appetite for the securities. Overall, this reflects a strengthening appetite for inflation-linked debt amid current inflationary concerns, likely influencing rate expectations and overall market sentiment.