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$40 Billion 5 Year Auction Closes At 2.47% High Yield, 39.82% Allotted At High
- Yields 2.470% vs. Exp. 2.4625
- Bid-To-Cover 2.40 vs. Avg. 2.31 (Prev. 2.51)
- Indirect 44.8% vs. Avg. 46.20% (Prev. 56.3%)
- Indirect Bid-To-Cover: 1.26
- Allotted at high 39.82%, compared to 16.55% a month ago.
- Direct bidders increased to 11% compared to ~4% pre money market guarantee expiration (per Santelli): new capital flow?
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If it's new money flowing, they wanted a higher yield, didn't they? Of note was the 39.82% allotted at high.
The change in 10 yr interest rates doesn't look like money flowing in to me. Wonder if BB has just been surprised?
so they have $40 Billion to throw at the market today...HOORAY!!
Can't imagine they won't toss this junk up over dow 10K on some sort of "stabilizing" nonsense.
some trader on the nyse on bloomberg said that 10k is a given. they are starting to talk about 11k. WTF
Dealers do not want to own the issue in front of the Fed announcement.
Real trading will begin when they clear the air with the statement at 215PM.
This was just a way to punish the taxpayer for the misfortune of selling $ 40 billion 5 year notes with heavy event risk.
This was pretty much a ho-hummmer.
Just a wild guess, but I gather that some (inv) banks are using excess reserves these days to buy Treasuries, instead of priming the money multiplier pump by making loans to the huddled masses.
Perhaps when the Fed buying spree was in full force, some of these banks (Goldman) were effectively using these reserves to squeeze the ever loving life out of short sellers.
What this tells me (and it may be way off the mark, mind you) is that the unwinding of the beta trade is about to begin. It was a good idea for the Fed to taper the T-note purchases off into October-- mutual fund PM's and pension managers are likely dressing up their portfolios with these equity pigs right on the cusp. Stupid is as stupid does.
If Goldman and other TBTF's are rolling their trades right now into the T-Note market, they can induce a flight to quality anytime they want as they bag their junk-@$$ trading gains.
They're making this look almost too easy.
For sardonicus.........the wont have the money until next wednesday when the buyers pay for it.
And they might need it to pay social security on the 3rd!!
did a new law get passed that dictated ONLY one down day (never more than (0.5%))allowed in any 14 day period?
Meanwhile, the long end is getting the divine hammer today.
Or not.