10 Year Bond Prices At 3.499% As Foreign Demand Drops By 25%

Tyler Durden's picture

Today the government auctioned off a reopening of the 912828PX2 10 Year, which at $21 billion, priced at 3.499%, and a 3.32 Bid To Cover. The auction was decent, pricing inside of expectations of 3.535%, however it was nothing like last month's blowout 10 Year which saw the highest Indirect take down on record at 71.3%. This time around, foreign institutions supposedly bouth 53% of the full amount (at a 74.5% hit rate), with Primary Dealers responsible for 40.5% (a really low 17.7% hit rate). Direct bidders remerged after their complete disappearance last month, and were responsible for 6.5% of the take down. Since the auction process is now a farce, and really no longer matters as it is merely an intermediary step to fund PDs, who promptly flip bonds back to the Fed, we refuse to dig too deep into what if anything today's action means for bond demand. If Bill Gross is correct, it means that USTs are in for a lot of pain in the future.

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plocequ1's picture

Is that you John Q Taxpayer? Is this me?

Cleanclog's picture

Could be PIMCO moved into cash and s-t durations in anticipation of a yield curve inversion, then buying back in to high s-t rates and eventually shorting 5% 30 years while waiting for them to go back to 8%.

43 Steelie's picture

TD, you may want to post Gundlach's interview on PowerLunch today when it becomes available. It was a good one. 


Sees a 15-20% drop in Muni prices. S&P 500 to 500 if they allow deflation to set in. 

Misean's picture

With 0$ of QEzy POMO available, the auction would have sold like....um...let's see -$12B - $0.5ishB fee for holding Lootery trash for 7 days - $???WTF!!!! = ~0.

And Unky Sugah! only wants to dig the hole, what, say $2T deeper this year. Don't see a problem at all....

uhb's picture

Well, i am glad to say that Mr Gross and i are absolutely d#accord in regard to US- and Euro- gov't bonds... those "risk-free assets" are not what they used to be ;)

metastar's picture

I suppose that "risk free" is no longer worth the risk.

trendybull459's picture

Bill Gross is wise man,but you are who posting here is doomed,because i counted over posts and asked to vote for FED existence in my blog:


But it was just 3 brave people to respond,which meaning that all of you is sartisfied with current environment and you probably forgot that today Jasmin reolutions based on internet first by FED elite to screw nations,I calling for thoose who wish FED abolished to vote or to leave comments at least,the thing which is world lags today is trust between us!!!

Go and vote,World should not affaid of monster eating into our wealth on everyday basic

jus_lite_reading's picture

You mean to tell me the "buyer of last resort" is really the only one buying? What happened to Chindia? Whoops! India had a trade deficit of $200 BILLION last year! I guess they won't be buying! Hey, at least Germany is doing good.

collegepunk's picture

except for the fact that Germany's GDP growth is now slowing...

Buck Johnson's picture

No, Bill Gross is setting the stage for himself to get out of the game and also set up his story to tell the world that it wasn't his fault but those people fault.