Concluding the week’s issuance of $104 billion in coupon paper, moments ago the US Treasury auctioned off $31 billion in 7 Year notes, which priced at a high yield of 2.844%, stopping through the 2.85% When Issued by 0.6bps, and below last month’s 2.93% yield, but above the 6-month average yield of 2.863%. 

Internals were mixed, with the bid to cover an impressive 2.65, above the 6 auction average of 2.863%, and the highest since January. However, the buy side composition was strange, with Indirects taking down only 59.5%, below the average of 62.5% and the lowest since January. This, however, was offset by a surge in Directs which took down 19% of the bond, the highest since August 2014, and far above the 13.4% average, leaving 21.5% to Dealers, below the 24.1% average.

Overall, a solid auction, and certainly stronger than yesterday’s mediocre 5Y sale, if with a few asterisks.