Demand Slack at US 30-Year Bond Sale Second Day Running

• Highest accepted yield 5.441% compared with when-issued 5.437%.

• A tail of 0.4 basis points was recorded.

• Bid-to-cover ratio at 2.36x versus the 2.44x average.

• Dealer allocation rose to 11.39% from the 9.49% mean.

Thursday's auction of $25 billion of 30-year Treasury bonds disappointed, reinforcing evidence of weakening appetite for long-dated debt.

A tail of 0.4 basis points emerged as the auction closed at 5.441% against the when-issued yield of 5.437%. This was worse than the 0.1 basis point tail in the previous sale and the six-auction average stop-through of 0.1 basis point.

Coming in at 2.36x, the bid-to-cover ratio declined from last month's 2.54x and the six-auction average of 2.44x.

The composition of buyers was not reassuring. Indirect bidders, including foreign central banks and institutional investors, captured 68.11%, a decrease from last month's 72.32% and under the 70.49% average.

Dealers absorbed 11.39%, a sharp increase from 6.79% in the prior sale. Direct bidders accounted for 20.5%, broadly consistent with recent averages.

These figures come after a weak 10-year auction on Tuesday and indicate that investors remain hesitant to extend duration, even with lower yields before the sale.

On the positive side, the high yield of 5.441% was significantly below last month's 5.618%, but this stems more from a general bond market rally than from improved demand.

The overall impression is another disappointing sale, with the elevated dealer share causing particular concern. It is not a complete failure but offers little confidence in the long end of the Treasury market.