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Busted Auction - Brazil Rejects All Offers For Its 2021 Fixed Rate Treasury Notes
Earlier today Brazil held a treasury auction for National Treasury Bills due 2011 and 2012, Treasury Financial Bills due 2012 and 2014, and most importantly Fixed National Treasury Notes due 2014 and 2021. The bulk of the easy to sell treasuries were sold, especially the 2012 LTN Bills sold to yield 12,2863%, yet curiously Brazil announced that it had rejected all offers for its 2021 NTN bonds at auction. The attached chart demonstrates just which tranche failed to place.
We are trying to uncover what the Bid To Cover on the 2021 NTN was, but more curious as to what rate investors were demand for this 11 year paper that forced the TesouroNacional to balk at selling at such a "high" rate, in essence leading to a busted auction. In the aftermath of the auction the BRL has lost 100 pips.
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They need some "direct bidders"...
Ben's a little busy in the EUR/USD and EUR/JPY markets today...
Maybe they can call Wen Jiabao?
@TF
Well played.
Now that's funny.
Benny must have been in the shitter when the auction went off.
The BRL is doomed, as China already has stepped on the breaks on iron ore etc imports from Brazil. Back to their good old history of inflation then. Next currency will probably be called BRYuan.
Inflation? Again? Please, no!
I don't want to have to stockpile higienic paper at the very same day I receive my monthly wage payment, like in the old times of 1991...
Don't worry, at least you won't have Ben's face printed on yours!
Living here in Brazil in that years of 1988-1992 was pure adrenaline...
You can not imagine what is a busy supermarket in the first five days of the month (when most people receive their wage payments), with everyone fighting for the powder soap boxes and the milk cans, in order to make the largest possible domestic stockpile, since within a week everything would be about 30% more expensive...
Wow. Stone cold awesome. I had NO idea that ZH was home to such an erudite with not only penetrating and timely experience on the Israel blockade situation, but now clearly has a real-life perspective on what it's like to live in Brasil.
What up jerky brother? Who the heck from Brasil spells it Brazil? Let me guess - you'll be commenting next on life under Mussolini.
"Brasil" is Portuguese. "Brazil" is English. Since I'm writing in English here, I have to use "Brazil".
Wanna proof I'm brazilian? So let me sing "Dança do Créu" and "Rebolation":
Dança do Créu
"É créu!
É créu nelas!
É créu!
É créu nelas!
Prá dançar créu
Tem que ter disposição
Prá dançar créu
Tem que ter habilidade
Pois essa dança
Ela não é mole não
Eu venho te lembrar
Que são 5 velocidades...
A primeira é devagarzinho
Só o aprendizado.
É assim, oh!
Créeeeu...
Créeeeu...
Créeeeu...
Se ligou? De novo!
Crééééu...
Créeeeu...
Créeeeu...
Número 2!
Créu, créu, créu
Créu, créu, créu
Continua fácil, né?
De novo!
Créu, créu, créu,
Créu, créu, créu!
Número 3!
Créu, créu, créu, créu...
Tá ficando dificil, hein?
Créu, créu, créu, créu !
Agora eu quero ver a 4!
Créu, créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu, créu!
Tá aumentando mané!
Créu, créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu
Créu, créu, créu, créu
Créu, créu, créu
Segura DJ!
Vou confessar a vocês
Que eu não consigo
A número 5
DJ!
Velocidade cinco
Na dança do créu!!
Créu-Créu-Créu-Créu-Créu-Créu-Créu-Créu-Créu-Créu-Créu-Créu."
Rebolation
"Rebolation é bom, bom Rebolation é bom, bom, bom
Bota a mão na cabeça que vai começar
O Rebolation, tion o rebolation, o rebolation, tion, rebolation
O Rebolation, tion o rebolation, o rebolation, tion, rebolation
Alo minha galera preste atenção Rebolation é a nova sensação
Menino e menina não fiquem de fora que vai começar o pancadão
O suingue é bom gostoso de mais
Mulheres na frente os homens atrás
Mão na cabeça que vai começar
O Rebolation, tion o rebolation, o rebolation, tion, rebolation
O Rebolation, tion o rebolation, o rebolation, tion, rebolation
Rebolation é bom, bom Rebolation é bom, bom, bom
Rebolation é bom, bom. Se você fizer fica melhor..
Bota a mão na cabeça que vai começar
O Rebolation, tion o rebolation, o rebolation, tion, rebolation
O Rebolation, tion o rebolation, o rebolation, tion, rebolation"
Unfortunately to the ZioNazi israeli murderers, even a humble mixed-race brazilian white-collar worker who earn less than 8 dollars per hour is capable of understand the crimes that are happening in Gaza, and use an international forum like Zero Hedge to express his indignation.
Ok, you got me. Your singing voice is great.
If the audio is important to you, okay:
http://www.youtube.com/watch?v=ONuvTjFCuJ4
http://www.youtube.com/watch?v=3lVn8ZhhwDQ
In 1993 Brazil (excuse me - Brasil) had 5000% inflation.
Some of us can find such information without having to actually live there. The internet is a wonderful thing.
Please, don't remember me that numbers!!
Well, with English like that, I think we have proof enough that you're Brazilian. :P
Thank you!
Take in account that I never was in a English-speaking country in my whole life, and never took English classes in an especific English course, only studied English in the regular elementary school and high school.
Uh, isn't Brazil one of those "emerging markets" that was supposed to be leading us out of The Greater Depression going forward?
Looks like they're going to be "emerging" for some time to come.
""Brazil has the highest tax-to-GDP rate in the Western Hemisphere and guess what — they're growing like crazy, And the rich are getting richer, but they're pulling people out of poverty." - Hillary Clinton, May 29, 2010.
It is awesome to be in such good hands.
+1
Of course, she did make all that money on those cattle futures. ;)
Out of poverty by way of government hand outs, not work/salary. They also saw a fantastic growth in middle class due to lowering of income brackets that define the "classes". You may be middle class even if you pay rent in a slum area and have no disposable income.
Heeeey!! Don't be so cruel...
At least, on Lula's "brazilian miracle" all the poor now have a cell phone and a DVD player to watch the "Rebolation" music video at full volume!
O Rebola-tion-tion, o Rebolation!
wow, she truly is a dumb-fuck - I must have blocked the daily harangue from her bitch ass during the election from my conscious memory
now I remember why I hated her so much - in other words, fuck that ho...
This rejection happens from time to time. It's not the first in this year, if I'm not mistaken. I remember seen another rejection not a long time ago.
It's not the case of year.
Rates here: http://www.tesouro.fazenda.gov.br/tesouro_direto/consulta_titulos/consul...
Same thing happens all the time with Russia and its domestic ruble-denominated bonds.
Ainda bem que não invisto minhas parcas economias em Renda Fixa, só em CDB pré.
A turma da Renda Fixa se fudeu... E os que gostam do TesouroDireto? Mais fudidos ainda!
Zina,
it's a good investment. The rates are really similar to those in CDB's pré. And in TD you can choose between "pré" and "pós" fixados.
Abraços!
A selloff in Tesouro's bonds won't be good to Renda Fixa investors...
Yes, with the US rate at 0%, you can only have option. Increase rates -> pós-fixados.
I was talking about LFT's, it's a pós-fixado. Tesouro Direto offers more than pré, that's all.
This is what will soon happen in the US Treasury auctions for 10 and 30 yr. The FED is the only buyer at these rates. People are just flipping bills right now. $130 Billion in redemptions this week alone due. Does Bernanke have enough printed up and counted? The day he can no longer do it, the U.S. bond market is going to explode and the Stawk Market is going to crashola.
Does anyone know the final tally of Treasury debt rolled over in May? Did ZH report that?
Thanks
"Brazil is the future, and always will be." That joke will be long-lived. I don't know why analysts talk up resource-rich near socialist regimes as being new leaders in the global economy when the only reason they are doing well is because of the commodities boom.
If you have ever done business in Brazil, you know what I'm talking about.
The "near socialist" part was funny.
Roubini is to blame..he was Keynote at Brazilian Economic Forum!!! lol
This is the second auction in a row that Brazilian treasury rejects all the bids for the 2021 bond. Absolutely no big deal. Brazilian treasury doesn't publish bid-to-cover ratios, but my guess is that they rejected even proposals at prevalent market rates - they have a very comfortable liquidity cushion.
Agreed.
Yeah, and we have a public debt load of almost a trillion dollars, which pays more than 10% a year in interest. It won't end well...
It won't.
We are in the same ship as the US, Japan and Eurozone.
Well when it ends you'll still be surrounded by brazillians. When it ends here unfortunately we'll be surrounded by americans. LOL
BTW 2021 bonds are trading 6 bps tighter... nothing to see here.
The $/euro last is 1.2250
It has now given up half the gains "purchased" for it by our Fed this morning.
Didn't Brazil impose a 2% tax on foreign investment last year to discourage capital inflows?
Kinda annoying how the robots trade the currencies tick for tick with stocks. Hope they short circuit.
Moody's downgrades Commercial Bank of Dubai; negative outlook
* Moody's cuts Commercial Bank of Dubai foreign currency deposit
rating to A3/Prime-2 from A2/Prime-1
you can be confident Moody's will be embroiled in a sex scandal before they put the US on watch list. Sex scandals are the only thing that works in the US - to get a good head of righteous steam going.
Got that right. Dubai is a mountain of debt soon to become a ghost town. However owns those bonds better prepare for a haircut.
wonder if we'll get the usual blast at 3:45pm - 15 minutes of unlimited liquidity - ya know - just so the msm can say June is off to a great start.
You got that right, mac. Wouldn't be a surprise at all.
Well there certainly was a blast - opposite direction, but a blast nonetheless.
WHO DO YOU CALL WHEN YOUR BOND ACTION FAILS?!
THE FED BUSTERS!
Just call 1-800-WE'RE SCREWED!
Ben's ready to take your call anytime!
http://screaming-eagles.com/wordpress/wp-content/uploads/image/Pick%20up%20the%20red%20courtesy%20phone.jpg
I have to laugh. Hillary just said Brazil was the shiz and growing like crazy and we should be more like them. I had no idea she was talking busted auctions. If so, I suspect we will be like them, berry, berry soon.
Uh, this could be that hidden trigger event boys and girls that failed auctions are about to hit not just emerging markets like the BRIC but also some existing hot spots like the PIIGS and perhaps CA, IL, etc......wow.
Zina I remember those days well... :)
A lot of adrenaline, no? I remember the 50,000 cruzeiros bill:
http://upload.wikimedia.org/wikipedia/commons/7/74/Brasil_Billete_de_500...
We could buy a sandwich with that!
Failed auctions, in a country that is supposed to have a bright future hmmmm. But in the US we never have failed auctions, just direct bidders who love to buy hundreds and hundred of billions of dollars at very very low rates. This secret benefactor must love low rates instead of high ones, because if I had all that debt I would be demanding higher rates.