When Issued 2.819%, the lowest yield for the tenor going all the way back to October 2016 as the curve has aggressively flattened since then.
The internals predictably were solid, with the Bid to Cover rising to 2.139 from last month's 2.306, above the 6 month average of 2.27. But it was the surge in foreign bidders that stood out as Indirects took down 66.8%, the second highest on record with the exception of July 2016 when indirects were awarded a record 68.5%. Directs declined modestly from 6.4% in July to 5.4%, leaving Dealers with 27.8%, one of the lowest on record.
And with neither the OTR or Off the Run trading special in repo, there was no squeeze today, confirming that today's strong auction was not a squeeze but merely the market telegraphing that the curve continues to aggressively flatten in an ominous message to the Fed.