If yesterday's 3Y auction was both good and bad, good as it stopped out and saw solid Indirect participation, bad as the bid to cover plunged to a 10+ year low, then today's 10Y reopening of the 9 year 10 month CUSIP 6T2 was both bad and good, and in many ways was a mirror image of yesterday's 3 Year.

First of all, while on Tuesday the bond auction stopped through, today's sale of benchmark paper which stopped at 2.064% tailed the When Issued 2.057% by 0.7bps. Even so, the high yield dropped by 7.2bps from 1.129% in June, and was the lowest yield going back to November 2016.

Meanwhile, the internals were somewhat better, with the bid to cover dropping modestly, but nothing compared to yesterday's plunge: at 2.41, the BTC dipped from 2.49 and just below the 6 auction average of 2.44; still there have been numerous auctions in the past three years whose BTC was even lower.

As for the bid breakdown, 60.8% went to Indirects, a decline from last month's impressive 65.6%, if above the 62.2 recent average, and with Directs taking down 12.9%, precisely on top of the six month average, this left 26.4% for Dealers, which also was just above the average.

Overall, a mediocre auction, with the bond market paring some gains after the size of the tail was announced, even if the remainder of the auction was generally solid.