Stellar 10Y Auction Stops Through, With Highest Bid To Cover In A Decade On BIggest Yield Since 2007

After today's very disappointing buyback announcement, which at $6BN came in far below whisper expectations of $10BN, and which sent yields surging to 4.85%, many were on edge ahead of today's $39 billion sale of 10Y paper. In the end, it priced far stronger than expected, with today's selloff providing a sufficient concession to stir up enough demand to avoid a fullblown bond market panic. The 9 Year/11 month reopening of cusip ER0 stopped at a high yield of 4.834%, up from 4.680% in August, and the highest since August 2007!Just as importantly, the auction stopped through the When Issued 4.384% by 1.5bps, the biggest stop through since April 2025, which was some much needed good news in a day when yields soared briefly above 4.85% on their path to the inevitable date with 5.00%The bid to cover was stellar at 2.713, it jumped from 2.532 in August and was the highest since April 2016.The internals were even stronger, with indirect bidders taking 79.18% of the issue, one of the highest on record, while primary dealers were left with just 4.31%, the lowest participation since late Sept 2025. Direct took down 16.51%, right in line with the recent average of 16.42%.In short, this was a stellar auction, which helped pare some of the earlier blowout in yields following today's buyback announcement, with the 10-year note last yielding 4.837%, up 3.26bp on the session but off its pre-auction highs.