Weak 5 Year Auction Spooks Bonds, Big Tail To When Issued
Today's $35 billion 5 Year auction closed surprisingly weak, pricing at a high yield of 2.149%, a huge tail as they were trading at 2.07% WI. The bond came at a 2.61 BTC, Indirects accounted for 35.6%, Directs for 6.2%, and the balance, or well over half, was soaked up by Primary Dealers, who had to make sure this auction was not a dud. As access to our Treasury database is limited those wanting to see the auction represented visually will have to take our word for it for just how ugly it was. We are confident the bond weakness will be misrepresented by the Kool Aid Krew as a very positive development for stocks.
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