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$21 Billion 10 Year Auction Closes At Fresh 2010 Low Yield, Indirects Surge To Highest In One Year
Today's $21 Billion 10 Year auction (technically a reopening of a 9 Year 11 Month Note, cusip NT3) closed at a fresh 2010 low yield, 2.67%, and the lowest since only January 2009's 2.419%. The Bid To Cover jumped from 3.04 to 3.21, in line since the 2010 average of 3.16. Yet the most notable observation, and confirming our expectation that Indirect bidders have a soft spot for the 10 Year, or frontrunning the Fed ever to the right on the curve, was the Indirect take down, which came at the highest number, or 54.7%, since September 2009. Direct Bidders plunged to the lowest since November 2009, which is expected: when every traditional player can't get enough of the auction, there is no need for the mysterious London bidder to emerge. Primary Dealers at 38.3% dropped to the lowest level since May 2010. The auction came in tight of the When Issued (2.685%), meaning there was a selloff into the auction, and now we are likely to see a pickup in bids for the 10 Year into the close, especially with an upcoming Obama address.
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Pro wrestling update:
Aloisia, the 6-foot-9 rookie diva who was pulled from NXT Season 3 because company officials discovered ‘erotic photos’ of her online.
Trust me, no needs to see erotic photos of a 6'9" chick.
http://weblogs.baltimoresun.com/sports/wrestling/blog/2010/09/aloisia_comments_on_erotic_photosstory.html
Eat that crap sandwich, Erin Burnett!
Bernanke is my hero. God bless him and all his attempts to raise the markets. He is a modest man who will always listen to reason.
(:
There has been a lot of comment on the mysterious London bidder who has ramped up UK holdings of US Treasuries.
Conspiracy theorists see the invisible hand of the Fed.
These UK purchases are primarily Middle East oil revenue recycling zero-coupon US dollars into interest-earning US Treasuries. Even a low coupon is better than zero - and dollar denominated holdings better than PIIGS-stricken euros.
Front-running the Fed has never been easier... or more fun!
Nice article thanks.
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