Here’s the thing: the auction went better than expected. The bid-to-cover ratio came in at 2.75, meaning there were $2.75 in bids for every dollar of debt on offer. That’s above the recent average of roughly 2.65, suggesting investors aren’t exactly running away from long-dated US government paper.
Foreign buyers showed up in force
The most interesting detail isn’t the yield. It’s who was buying.
Indirect bidders, a category that primarily represents international investors and foreign central banks, took down 73.2% of the auction. That’s a significant jump from the recent average of 64.9%. In plain terms, overseas buyers accounted for nearly three-quarters of the entire sale.
Domestic direct bidders, by contrast, accounted for just 19.9% of bids, falling short of their typical 24.3% share. Primary dealers absorbed only 8.5% of the issuance. When dealers take a small slice, it generally means real buyers showed up and wanted the bonds. Dealers getting stuck with a large allocation is usually the warning sign, not the other way around.
