First the good news: the auction stopped at a high yield of 2.538%, stopping through the When Issued 2.547% by a whopping 0.9bps, while the yield was the lowest since December 2017, and well below last month's 2.625% as one by one rates traders expect the Fed to start cutting rates soon.

The internals were not nearly as strong, however, with the Bid to Cover rising to 2.60, up from 2.54% in January and above the 6 month average of 2.51. More importantly, there were continuing signs of a foreign bidder boycott, if not nearly as harsh as the one observed during the 2Y auction earlier this week, as Indirects took down only 55.2%, below the 58.3% in January, and the lowest Indirect print since the 47.1% in December 2015. Directs, meanwhile, surged just like in yesterday's 5Year auction, rising to 28.4%, the second highest on record, and just below the 32.6% Directs in March 2014. This means that dealers were left with just 16.4%, the lowest since the 11.7% in January 2018.