Decent Enough 10-Year Auction

The previously outlined allure of new paper & the attractive carry and rolldown proposition vs. the belly of the curve likely supported takedown at today's 10-Year auction, with the price tail narrowing back to a compact length after last month's widening, while the cover ratio ticked back from the multi-year low witnessed at June's 10-Year JGB auction. The low price topped broader expectations, proxied by the BBG dealer poll (100.38). Still, in the grand scheme of things it wasn't the strongest auction we have seen and was working against a low base, with some of the aforementioned valuation (both outright and relative) matters likely constraining demand.