The long bond auction was pretty ugly. Pre-auction expectations were for a 4.48% yield, it came at 4.52%. That's a huge tail on the long bond.

Secondary stats were so-so. Bid/cover was 2.45x, slightly better than the last two long-bond auctions (2.26 in November and 2.37 in October). Indirect bid was a little weaker than November's auction (40.2% vs. 44%) but up from 34.5% in September.

Bottom line is that there are plenty of buyers of U.S. Treasuries but on this day, it took a higher yield to get it done.

Market isn't reacting too much. The bond is down just over 1 point and the 10-year is down 3/8. Both were around those levels just before the auction. Resiliance in the face of such a bad auction reiterates my view that origination buying shows up at 3.48% on 10s.