• High yield: 2.973%
• WI level at the time of the auction 2.991%
• Stopped through by 1.8 bps
• Bid-to-cover ratio 2.82X
• Direct (domestic buyers) 13.4%
• Indirect (international buyers) 84.4%
• Dealers 2.1%

The US Treasury’s $9 billion auction of 30-year Treasury Inflation-Protected Securities (TIPS) attracted exceptionally strong participation from foreign investors.

The auction stopped at a high yield of 2.973%, below the 2.991% when-issued (WI) yield trading in the market at the time of the sale. The resulting 1.8 basis point stop-through indicates investors were willing to accept a lower yield than expected to secure the bonds, a sign of stronger demand.

Demand metrics were also robust. The auction recorded a bid-to-cover ratio of 2.82x, meaning investors submitted nearly three times as many bids as the amount of securities offered.

The most notable feature of the auction was the overwhelming participation from indirect bidders, a category that typically includes foreign central banks, sovereign wealth funds, and international institutional investors. Indirect bidders took down 84.4% of the offering, an exceptionally strong share that highlights substantial overseas demand for US inflation-linked securities.

Meanwhile, direct bidders, which primarily represent domestic institutional investors such as pension funds and investment managers, purchased 13.4% of the auction. Primary dealers were left with just 2.1%.

Overall, it was a solid auction.

This article was written by Giuseppe Dellamotta at investinglive.com.