The cooling of US inflation failed to rescue the ultra-long-term US bond auction! Bleak sale of 30-year Treasury bonds

On Thursday local time, the US Treasury auctioned $22 billion of 30-year Treasury bonds, with overall results being poor, as bid-to-cover ratio and overseas demand were lackluster. The winning yield for this 30-year US bond auction was 4.405%, slightly higher than the 4.403% on June 13. This is different from the recent trend of auction yields generally lower than in June. The winning yield this time was 2.2 basis points higher than the pre-issued yield of 4.383%, marking the largest tail spread since the record 5.3 basis points in November last year, reflecting weak demand. The bid-to-cover ratio for this 30-year US bond was only 2.30, the lowest since November last year, compared to 2.49 in June. As an indicator of US domestic demand, the allocation to direct bidders, including hedge funds, pension funds, mutual funds, insurance companies, banks, government agencies, and individuals, was 23.4%, the highest since August 2014. Overseas demand was weak. As an indicator of overseas demand, the allocation to indirect bidders, typically foreign central banks and other institutions participating through primary dealers or brokers, was only 60.8%, the lowest since November last year. As the "buyer of last resort" who takes all unsold supply, primary dealers had an allocation of 15.9% this round, benefiting from the surge in US domestic demand, although this percentage was still higher than the 13.7% in June. Financial blog Zerohedge commented that overall, this was a very bad auction on a day when the US CPI cooled significantly, causing a sharp drop in the yield curve. The auction results pushed the 10-year Treasury yield up 2 basis points from its intraday low, hovering slightly above the 4.18% level. The short-term yield of the US 30-year Treasury bond rose by less than 2 basis points, approaching the 4.4% level, dropping 7.8 basis points intraday