Today's early (due to the FOMC statement and press conference) $35 billion in 5 year bonds auction was another uneventful issue of debt. Pricing at 0.899%, or well inside of the 0.915% When Issued, today's latest addition to the US $15.3 trillion in debt came at a 3.17 Bid To Cover, the highest since May 2011. The fact that BTCs continue to rise consistently even as yields decline makes lots of sense in some parallel universe, or in this one, when one considers that the bulk of the paper promptly makes its way to the repo market where it is quickly swapped for cash. The reason for the jump in implied demand was primarily the Direct Bid which took down 15.1% of the final allotment, the most since November 2010. The Indirect Bid was in line at 43.4%, compared to the TTM average of 43%, while Dealers saw a modest drop in their take down, coming below the average of 45.8% at 41.5%. This leave just tomorrow's $29 billion in 7 Year bonds in the weekly issuance docket, even without a formal debt ceiling raise. Net of all auctions that have taken place while the debt ceiling has not been increased, total US debt is now well in the $15.3 trillion bucket.
