Treasury Issues $35 Billion In 2 Year Notes At 0.673%, At A Low Bid To Cover

Tyler Durden's picture

Today's very ironic $35 billion 2 Year Bond with a Cusip identifier QE3 (no joke, check it) just priced at a 0.673% high yield, slightly higher than last month's 0.669%. Yet the notable metric that caught everyone's attention was the Bid To Cover which came at a 3.06 compared to 3.41 previously and 3.2 average. Primary Dealers took down 49%, with 38% left for Indirects and 13% left for the Direct Bidders, a breakdown in line with expectation. What is important is that dealers expressed the lowest amount of bidding interest for this auction in 2 years: the $72.9 billion Primary Dealer bid was the lowest for a 2 Year auction since December 2008. This auction merely brings the total debt that much closer to the now largely irrelevant debt ceiling. And since there are another $64 billion in auctions over the next two days, it is about to get very tight in there. As a reminder, tomorrow's 5 year auction will close early at 11:30 am due to the Fed press conference.

Due to technical issues we will provide the chart associated with this auction later.

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Robslob's picture

So QE 3 already in action?

hambone's picture

Anybody venture to tell me what the fuck we are looking at today -

T's yield falling - equities to the moon

dollar weak - commodities weak


DavidC's picture

You and me both hambone - I guess Ford's results must prove everything is OK...


hambone's picture

Treasury market chasing down to 3.31% yield like market is about to crash while stocks on 3yr highs and dollar breaking to new three year lows but nobody wants tbtfd for commodities...not sure if it's just me or if the market shares my confusion???


dogismyth's picture

Its a rigged market/casino!!  What else do you have to  know.  Even the news is under their control.  Virtually zero bad news today even with all the BS going on over in the ME, Fuku, levees under stress in the Midwest, protests in Iraq, Afghan and Pakistan over US occupation...blah blah blah.  Nothing matters anymore.  All is fair game baby.

ihedgemyhedges's picture

Oh people, pleeeez.  The Bernank's first news conference tomorrow!!!  HELLO!!!  Yields down = no inflation, commodities down = no inflation, stocks up = ebullient economy.

It's so simple......................Can't embarrass The Bernank, now can we????????

mayhem_korner's picture

Comex and Asian margin increases have pushed on-the-fence PM riders to the sidelines, and they're parking their money elsewhere in randomized, sheeple fashion.

The most important observation to me is that no matter the intervention, the dollar just can't hold its own these days.  And that's against a basket that includes the on-life-support euro and yen.

Today is one day.  Two days of aggressive bear raids and PMs have "crashed" back to mid last week.

plocequ1's picture

 Stocks are up. Thats all you need to know. 

hambone's picture

IYR to infinity and beyond!  3, 2, 1...get ready for a Robo chart update...

I think I'll buy DRV and it's cousins when they get to zero.


Strategery's picture

Please verify the identifier QE3. If that is true, these guys are out of control and are willing to steal more value from our pockets. Enough is enough. It is time to repeal or significantly alter the Federal Reserve Act!

camaro68ss's picture

um if this is true, time to buy more silver. I think im going to max out my Credit card on silver BITCHEZ!

hedgeless_horseman's picture

Any truth to the rumor that The Bernank's only props for his speech are a dollar and a lighter?

Threeggg's picture

Is this PDF frontrunning Benny on QE3 or a headfake, because you know everything that comes out of this guy's mouth tomorrow will be suspect ?

Well, not to the sheeple as it will be gospel.

NotAllowed's picture

Tyler heres my take:  Silver is down because of op-exs.  Trying to get people to not take delivery.  Also allowing people to buy in at a reduced price because QE3 is now assured.  Also scaring weak hands into selling so the TBTF can buy them out.  Thats why APMEX sent out that letter, they know silver is about to boom.  Also why China is dumping the treasuries, they know QE3 is about to happen, and will not stand for this anymore.  Just my opinion.

AldoHux_IV's picture

Just a hunch, but may see lower bid-to-covers from the dealers with the shorter dated issues because the long stuff is the potential target of the fed-- monetization has become more precise with the net effect of social class genocide.

slaughterer's picture

Agreed, who wants the short end, when the long end will be targeted in QE3-lite, to aid the mortgage market.

SheepDog-One's picture

'Mortgage market' good one!

slaughterer's picture

Perfect market dynamics for a QE3 announcement headfake.  Even the CUSIP!  For all the traders playing the breakout on the inverse H&S on the ES (many CANSLIM momo monkeys, trading on their IBD cup and handle on the ES), all will not be well if Ben does not pull out a real, authentic QE3 out of the hat.  Perfect time to go short the ES, Russell 2000, Financials, and the bubble commodities--if you want to follow GS, and wager there will be no QE3.  Or are the shorts being set up for another in a long sequence of squeezes tomorrow?   

DonutBoy's picture

Of what meaning is bid-to-cover when the Fed conducts secret funding operations?  They can put money in anyone's hands for any purpose.  There will be no auction failures.  In my view there's very little information in the metric.

Bazooka's picture

Can someone give a didactic summary of how these treasury auctions work?

What are the meanings of Primary dealers take down, bid to cover ratio, etc?




lolmao500's picture

So... since there's 64 billion in treasuries selling in the next two days... the debt ceiling will be within a few billions or what?

Smu the Wonderhorse's picture

CUSIP QE3!  Oh, that is simply too good to be true!  As Mark Steyn once put it to me, even an apocalypse needs a few laughs.

Sandy15's picture

Can someone call the number on the auction page to ask about the QE3 number?

Silver Bug's picture

Of course the primary dealer bid was the lowest since 2008, who would buy this garbage unless forced? Especially since China just expressed interest in dumping 2/3rds of theirs on the weekend? Don't worry the Fed will just buy it up and monetize it.

mayhem_korner's picture

Puts on eurodollar and a stack of physical PMs.  Pick yer poison, Benny, I've got you covered no matter what.

Joy.  :p

Bazooka's picture

Tyler, Cusip of QE3 to me is a hidden jab at you by Sacks and his NYU interns!

Bazooka's picture

Tyler, Cusip of QE3 to me is a hidden jab at ZH by Sacks and his NYU interns!

mayhem_korner's picture

Someone remind me what Greek bonds are yielding to attract investors?

earlthepearl's picture

IF QE3 is announced does Silver jump?