The latest 5-year Treasury auction was underwhelming, with a high yield of 3.747%, the highest since July. It also tailed the expected yield by 0.1bps, marking the 6th consecutive tail in the past 7 auctions.
Despite the disappointing results, Direct bidders came to the rescue, securing a record-high 31.7% of the auction. In contrast, foreign buyers only took down 59.5%, the lowest since September.
Dealers were left with just 8.8% of the auction, tying the lowest on record. This outcome paints a bleak picture of demand for 5-year paper, hinting at potential challenges ahead.