If the 2 Year auction earlier this week was described by many as “tremendous”, today’s 7 Year “belly buster” was nothing short of spectacular.

Pricing at a high yield of 2.565%, today’s 7Y auction stopped through the When Issued 2.77% by a whopping 1.2bps; as expected the yield was the highest since April 2011.

However, it was the internals where the auction true impressed, printing at a bid to cover of 2.73, this was far higher than last month’s 2.550 and well above the 2.50 6 month average.

And just like in the recently completed 2Y auction, the biggest surprise was the influx of foreign buyers, i.e. Indirect Bidders, who were awarded a near record 78.11%, a jump from December’s 60.5%, and far above the 6 month average of 65% and just shy of the all time high of 81.7%.

Directs were awarded 10.2%, a drop from last month’s 13.1% and below the 6MMA of 14.6%, while the Dealer takedown was 11.7%, a sharp drop from the 6 auction average of 20.5% as a result of surge in Indirects.

Overall, an impressively strong auction, which was not helped by a short- squeeze or any concession; in fact, the auction was so strong, it has managed to pull the entire yield curve lower by the “belly.”