That was as good as it got, because the internals were a disaster: the Bid to Cover plunged from 2.907 to just 2.578, the lowest BTC since Dec 2008 and clearly well below the 12TTM average of 3.17. Almost as if investors are no longer too sure in the short end... which makes sense: neither is the Fed, at least until it too unleashes NIRP.

The takedown was also ugly, with Indirects taking down just 47.4% of the auction, the lowest of 2016, leaving 37.4% to Dealers and some 15.2% to Direct Bidders, which was the highest since December.

Overall, a poor auction which however may be explained by the fact that international bidders, namely those out of Europe, were still out on holiday: this week's remaining auctions - the 5 and 7Y will be far more indicative of the market tone.