High Yield

Treasurys Sell Off After Ugly, Tailing 10Y Auction Despite Record Specialness In Repo

If the 3Y TSY auction which priced earlier was stellar, outperforming historical averages on every metric, then the just concluded 9-year, 11-month reopening of CUSIP 3F5 was mediocre at best, but more surprisingly, was the first 10Y auction to tail at a time when short interests - according to the repo market - was literally off the charts.

Stellar 3Y Auction: Highest Bid To Cover Since Sept 2015, Foreign Demand Surges

Unlike last month's ugly 3Y auction, today's just concluded sale of $24 billion in 3 year paper was stellar, stopping through the When Issued 1.934% by 0.2bps, a surge in buyside demand as the Bid to Cover jumped from 2.76 to 3.15, the highest since September 2015, while Indirect Bidders took down the most since August.

CME Unveils "Weirdest Chart Ever"

"Additional Fed tightening will flatten the yield curve more, which will eventually provoke an explosion in volatility as the VIX’s average level might double from current levels..."

UBS Unveils Its Top 5 Themes And 19 Trades For 2018

UBS today released its top 5 themes and 19 trades for 2018. Not surprising from the bank whose 2018 base case is S&P 2,900, the bank is optimistic and notes that the Kool-Aid party will continue unless "underlying macro shifts reveal fragilities in asset valuations." Well, yeah...