Preview 20Y Bond Re-Open

Today's $24B 20Y Bond auction re-open remains consistent with auctions since December, with the exception of a $3B increase to $27B at the prior November and February auctions.

The 20Y yield is currently trading around 2.16%, still well above the 5 month running average of 1.75% and 12bp lower than yields around last month's auction.

In light of the small .2bp average tail over the last 5 months, bond traders remain a bit gun-shy of the 20Y supply after the last two auction performances.

Markets have paid close attention to the past two 20Y auctions:

• Tsys surged higher in a relief rally after the March 16 auction reopening traded strong: drawing a high yield 2.290% vs. 2.315% WI.
• Tsys gapped lower after he $27B 20Y auction on Feb 21 drew a huge 2.3bp tail: drawing 1.920% high yield vs. 1.897% WI.

The 5 month bid-to-cover of 2.32x compares to 2.51x in March and 2.15% in February.

March auction's indirect take-up of 61.4% was the highest since October (with Nov-Feb all between 54.89%-61.22%). Primary dealer take-up of 21.56% was well off the 5 month average of 25.18%. Direct take-up climbed to 17.03%, the highest since December.

Timing: Results will be available shortly after the auction closes at 1300ET