If this week's 3Y auction was stellar (thanks to a surge of short covering), yesterday's 10Y mediocre (despite significant short covering), then today's 30Y was almost catastrophic, and could have been much uglier than last month's "30Y Tantrum" auction if it wasn't for the massive short covering into the auction, which made the auction somewhat better than it could have been. To be sure, tomorrow's CPI print was surely a major factor in the lack of buyside demand for the ultra-long dated paper.

Pricing at a high yield of 1.895%, the auction tailed the When issued 1.863% by a whopping 3.2bps, which was better than last month's devastating 5.2bps tail but as a reminder this has been a month where shorts get squeezed hard into the auction as pricing has been very special in repo. In other words, if it wasn't for the shorts, today's tail would have easily been bigger than last month's catastrophic 5.2bps tail.

The bid to cover was just ugly too, and while not quite as ugly as last month's 2.202, it printed at 2.219, well below the six-auction average of 2.290.

The internals were also ugly, with Indirects taking down 60.8%, slightly stronger than last month's 59.0%, if also below the recent average of 64.2%. And with Directs taking down 18.5%, this left Dealers with 20.71%.