If yesterday’s 2Y auction was surprisingly strong, today’s sale of $34 billion in 5Y paper was downright ugly.

Starting at the top, the auction stopped out at 1.828%, below last month’s 1.838% and in fact, the lowest since November’s 1.760%, a testament to how much demand there has been for the near-belly of the curve, and the ongoing flattening. On the other hand, the auction tailed once again, with the high yield tailing 0.7bps of the When Issued. On the other hand, the 5Y auction tends to be quite ugly: this was the 5th of the past 6 auctions that have tailed in 2017.

That said, the internals were just as ugly with the Bid to Cover sliding from 2.67 in May to just 2.33, and below the 6 month average of 2.46. Total bids of $83.4b for $38.1BN in total paper sold vs six previous auction average of $87.8b in bids for $38.0b in notes for sale.

Finally, indirects got 65.2% of the final takedown, down from 68.7%, and just above the 6 month average 64.6%. Dealers received 25.6% vs 22.7% last month, and below the 6 month average of 29.4%, and finally direct bidders were awarded 9.2% vs six previous auction average 6.0%.

Altogether, a mediocre auction, which perhaps was to be expected in light of today’s spike in yields across the curve following the “Draghi hawkish shock.”