Ugly 7Y Auction Tails As Foreign Demand Slides Despite Record High Yield

After yesterday’s dismal 5Y aucton which pushed yields to multi-decade highs, moments ago the Treasury completed its last coupon auction of the week, selling $44 billion in 7Y paper. It was another ugly auction, if not quite as ugly as yesterday’s shitshow.

The sale stopped at a high yield of 5.085%, up from 4.512% a month ago and the highest yield on record for 7 Year paper!

It was tailed the When Issued 5.078% by 0.7bps, the highest tail since March.

The internals were also poor as foreign demand slumped from 60.8% to 57.2%, the lowest since Nov ’25. And with Directs jumping to 30.3%, one of the highest on record, Dealers were left holding 12.5%, in line with the recent average.

Overall, this was a subpar auction yet it wasn’t nearly as bad as yesterday’s 5Y which as we noted at the time, was an absolute nuke. The lack of demand did nothing to help the secondary market and 10Y yields promptly pushed back near session highs, last trading at 5.15% and the highest going back almost 2 decades.