Independent research. The data analysis on this page is Todd Hanley’s own and does not represent the views of United Direct Lending. It is not lending advice and is not tied to any loan program, product, or lending decision. Educational content only. Not a commitment to lend, a rate quote, or an offer of credit. Todd Hanley, RICP® | NMLS #1013665 | United Direct Lending NMLS #1749719 | Equal Housing Opportunity.
Non-dealer bidders took 97.5% of the October 10-year auction, leaving primary dealers 2.5%, the lowest dealer share on record (since May 2008)
The Oct 7 10-year reopening sold at 5.300% with a bid-to-cover of 2.77. In 10-year futures, asset managers were net long 2,828,139 contracts in the week of Oct 6. High-yield spreads were 3.16% (+8bp over two weeks).
Q1 Who bought the latest 10-year auction?
Of $38.7 billion sold competitively on October 7, indirect bidders took 80.3% and direct bidders 17.1%. Primary dealers, who must bid and absorb what others do not take, were left 2.5%: the lowest dealer share on record (since May 2008), out of 220 ten-year auctions since May 2008. The bid-to-cover of 2.77 is the highest bid-to-cover since January 2016, when it was also 2.77.
| Auction | High yield | Bid-to-cover | Indirect | Direct | Dealers | Size |
|---|---|---|---|---|---|---|
| Oct 7, 2026 (reopening) | 5.300% | 2.77 | 80.3% | 17.1% | 2.5% | $38.7B |
| Sep 9, 2026 (reopening) | 4.834% | 2.71 | 79.2% | 16.5% | 4.3% | $38.9B |
| Aug 12, 2026 | 4.683% | 2.53 | 76.7% | 14.7% | 8.6% | $41.8B |
| Jul 8, 2026 (reopening) | 4.580% | 2.59 | 81.5% | 10.7% | 7.8% | $38.9B |
| Jun 10, 2026 (reopening) | 4.538% | 2.57 | 78.2% | 12.3% | 9.5% | $38.9B |
| May 12, 2026 | 4.468% | 2.40 | 64.0% | 24.1% | 12.0% | $41.9B |
| Apr 8, 2026 (reopening) | 4.282% | 2.43 | 65.3% | 23.9% | 10.8% | $38.9B |
| Mar 11, 2026 (reopening) | 4.217% | 2.45 | 74.5% | 12.8% | 12.7% | $38.9B |
| Feb 11, 2026 | 4.177% | 2.39 | 64.5% | 22.1% | 13.4% | $41.8B |
| Jan 12, 2026 (reopening) | 4.173% | 2.55 | 69.6% | 24.5% | 5.8% | $38.9B |
| Dec 9, 2025 (reopening) | 4.175% | 2.55 | 70.2% | 21.0% | 8.8% | $38.9B |
| Nov 12, 2025 | 4.074% | 2.43 | 67.0% | 22.6% | 10.5% | $41.9B |
Indirect bidders are foreign official and private accounts and domestic institutions bidding through a dealer; Treasury does not publish who they are. Allotments are shares of the competitive amount; the Fed’s own rollover (SOMA) is excluded. Allotments show who won the bonds at auction, not who holds them afterward.
Rankings cover 220 regular 10-year auctions since May 2008: each new 10-year note and its scheduled reopenings. 6 other Treasury records are left out: Oct 8, 2008, an off-cycle reopening of an older 10-year note (6-year 7-month left to maturity); Oct 8, 2008, an off-cycle reopening of an older 10-year note (6-year 10-month left to maturity); Oct 9, 2008, an off-cycle reopening of an older 10-year note (6-year 4-month left to maturity); Oct 9, 2008, an off-cycle reopening of an older 10-year note (9-year 4-month left to maturity); Jun 21, 2019, a $25 million small-value test auction; Nov 5, 2019, a 3-year note mislabeled as a 10-year in Treasury’s database.
Q2 How are futures traders positioned?
In 10-year T-note futures for the week of October 6, asset managers (pension funds, insurers, mutual funds) were net long 2,828,139 contracts, the highest asset-manager net long on record (since June 2006). The market has grown from 1,912,279 contracts of open interest to 5,742,990, so as a share of it, 49.2%, the position ranks 3rd of 1,061 weeks; the five highest weeks all fall since July 2026. That changed by +51,608 on the week, +402,157 over 13 weeks and +783,074 over a year. Leveraged funds were net −2,139,785 contracts. Most of that short is the basis trade, holding the bond and shorting the future against it, so it is not a directional bet on rates.
| Trader group (CFTC) | Net position | 1 week | 13 weeks | % of open interest |
|---|---|---|---|---|
| Asset managers | 2,828,139 | +51,608 | +402,157 | 49.2% |
| Leveraged funds | −2,139,785 | −103,353 | −135,762 | −37.3% |
| Dealers | −642,033 | — | — | — |
Q3 Are riskier assets being repriced?
The ICE BofA high-yield spread over Treasuries was 3.16% on October 13, +8bp over two weeks and +44bp over 13. Its 52-week low was 2.60%. The S&P 500 closed at 7,805.45 on October 13, against a prior high of 7,818.93, +3.5% over 13 weeks.
FRED carries ICE BofA spread history only from October 2023 under ICE’s license, so no longer comparison is made here.
Q4 What moved the 10-year yield?
Right now (October 14, 2:59 PM ET) the 10-year yields 5.190%, −3bp from the prior close of 5.217%, after trading between 5.177% and 5.329% today (Cboe 10-Year Treasury Yield Index). The breakdown below uses FRED’s daily series, which run behind: the latest is October 9.
The 10-year yield is the TIPS real yield plus breakeven inflation. Over the 13 weeks to October 9 the 10-year moved +68bp: real yield +59bp, breakeven +9bp. The 2-to-10-year curve is 0.42 percentage points (+2bp over 13 weeks).
| Window | 10-year | Real yield (TIPS) | Breakeven |
|---|---|---|---|
| 4 weeks | +28bp | +31bp | −3bp |
| 13 weeks | +68bp | +59bp | +9bp |
| 26 weeks | +93bp | +96bp | −3bp |
FRED daily close, October 9 (latest published)
Q5 Are banks and foreign central banks adding Treasuries?
U.S. commercial banks held $4,760 billion of Treasury and agency securities in the week of September 30 (Fed H.8, seasonally adjusted): +0.3B over 13 weeks and +95B over a year, and −82B from the 52-week high of $4,841 billion on July 29. Of that, $2,065 billion is Treasury and agency debt (+41B over 13 weeks) and $2,695 billion is mortgage-backed (−40B). Part of these holdings is carried at market value, so rising yields lower the totals without any selling.
Treasuries the New York Fed holds in custody for foreign central banks and international accounts were $2,565 billion on October 7, the lowest level since February 2011, when it was $2,555 billion (Fed H.4.1, face value, so changes are holdings, not prices): −25B over 4 weeks, −32B over 13 and −212B over a year. Foreign official holders also keep Treasuries elsewhere; this is the part held at the Fed.
| Holder (Fed data) | Latest | 4 weeks | 13 weeks | 52 weeks | From 52-week high |
|---|---|---|---|---|---|
| Banks: Treasury & agency, total (Sep 30) | $4,760B | −44B | +0.3B | +95B | −82B |
| Treasury and agency debt | $2,065B | −13B | +41B | +111B | −21B |
| Mortgage-backed | $2,695B | −32B | −40B | −16B | −72B |
| Foreign official custody at the Fed (Oct 7) | $2,565B | −25B | −32B | −212B | −235B |