US sells USD 26bln of 5-year TIPS; tail 0.2bps
- Tail: 0.2bps (prev. -0.7bps, six-auction average 1.7bps)
- High Yield: 1.367% (prev. 1.433%, six-auction average 1.626%); WI: 1.365%
- B/C: 2.57x (prev. 2.62x, six-auction average 2.41x)
- Dealer: 8.5% (prev. 5.4%, six-auction average 12.8%)
- Direct: 26.9% (prev. 21.9%, six-auction average 20.6%)
- Indirect: 64.6% (prev. 72.6%, six-auction average 66.6%)
Context
Today's auction of USD 26 billion in 5-year TIPS showed a relatively modest tail of 0.2bps compared to the recent average, indicating solid demand. However, the bid-to-cover ratio slipped slightly, suggesting lower participation from dealers, which may raise some concerns about upcoming auction demand. Overall, while the high yield was lower than previous auctions, the strong direct and moderate indirect bidder participation might reflect ongoing investor interest in inflation protection assets.
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