After yesterday's solid 2Y auction, today's 5Y auction was an uglier mirror image. 

The sale of $70BN in 5 year paper priced at a high yield of 4.200%, up from 4.182% in May and the highest since Jan 25. It tailed the When Issued 4.193% by 0.7bps, and was the 8th consecutive tail for the 5Y tenor.

The bid to cover was 2.351, better than the 2.340 in May and the highest since October. 

The internals, however, a disappointment: Indirects took down just 61.60%, a big drop from 74.85% in May and the lowest since January. And with Directs jumping to 25.51% from 12.34% in May - the highest since January - dealers were left with 12.9, the highest since March.

Overall, this was a rather disappointing auction, and one which pushed yields fractionally higher from the lows of the day, although considering the big slide in the 10Y from 4.49% this morning to just over 4.40% we doubt too many will lose sleep.