In some ways, today's 2 coupon auctions were mirror images of each other: while the $32BN, 3Y auction tailed modestly, its internals were impressive, with the highest Indirect award in 4 years. Fast forward 90 minutes when the Treasury just sold another $22BN in paper, this time in 10Y notes, at a yield of 2.962%, stopping through the When Issued 2.965%, and below last month's 2.995%, when there was must angst whether we would see the first 3% cash coupon in years ( we did not). Well, with the yield dropping further, today's coupon was a boring, old 2.875%.

Meanwhile, as the yield dropped, the internals deteriorated, and Indirects were left with 56.0% of the takedown, down from last month's impressive 63%, and well below the 6 month average of 63.1%. And while Indirects slumped, Directs surged to 16.3%, nearly doubling from 8.3% last month, leaving Dealers with 27.7%, in line with the 6 month average of 29.7%.

But despite some modest internal weakness, the auction was digested relatively easily, and just like that the US government has placed another $54BN in coupon paper with willing investors who are happy to fund the US persistant budget deficit.