Foreign Buyers Slide In Otherwise Strong 20Y Treasury Auction The quiet week before Christmas is hardly the best time of the year for the US government to go out begging for cash and sell bonds, unfortunately with the US deficit set to soar (yet again) thanks to the latest $900BN stimulus bill which will pass shortly, the US Treasury does not have the luxury of deciding what to beg, and moments ago it sold $24 billion in a reopening of the November 20Y Treasury, the 8th such auction since it returned in May after a 34 year hiatus. The auction stopped at a high yield of 1.470%, the highest since the return of the tenor. That said, the auction came in stronger than expected, stropping through the When Issued 1.478% by 0.8bps, compared to November's 0.9bps tail. The bid to cover was also an improvement compared to last month, rising from 2.27 to 2.39; it was also right on top of the six-auction average of 2.40. Alas, while the rest of the auction was strong the internals were dismal with Indirects taking down 56.3%, not only far below last month's 61.2%, and below the six auction average of 61.2%, but also the lowest since the auction's return in May. And with Directs stepping up just modestly from 15.3% to 17.7%, Dealers were left with 26.0%, the highest since the return of the 20Y auction, and well above November's 23.5%. Overall, a solid auction on pricing terms, but disappointing in terms of participation and foreign demand. Tyler Durden Mon, 12/21/2020 - 13:17