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Very Weak 3 Year Bond Auction Prices At Highest Yield Since July 2011, Lowest Bid To Cover Since 2010
If there is one word to describe today's 3 Year $32 billion auction it would be atrocious. With the When Issued stopped at 0.577%, the closing high yield tailed notably at 0.581%, a dramatic spike from last month's 0.354% and the highest yield since July 2011, indicating substantial turbulence on the surface. Beneath the surface it was the same story, with the Bid To Cover plunging from 3.38 to just 2.95, the lowest since December 2010, driven by a crash in Direct Bidder take down to just 8.4% from 14.6% and a TTM average of 12.9%: this was the lowest Direct interest since August. The result was that Indirects were left with a sizable 33.1% of the auction well above the 26.3% TTM average, and Dealers had to absorb the remainder, or 58.4% of the auction. All in all, a very ugly auction although with investors still demanding only 0.5% to hold 3 year paper it would appear that any fears of an imminent hike in rates (regardless what the Fed does with the longer-end of the curve), is still far away.
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So Bill Gross wasn't buying?!
neither was China, it appears
Must be time to taper.
The Fed'll buy! The fed'll eventually buy EVERYTHING! You got an underwater mortgage? You got it pal! FED! FED! FED! FED!
Anyone watching the usd/yen? Down huge again
^TNX & ^FVX = Aces & Eights for Bernanke - and all the Pilots of the Hindenburgs/Titanics...I mean "central banks."
And Go! Go! Kuroda-san! Dig deeper, faster!
gettin' killed as the whole yield curve sells off. still don't see the "good news" however. inflation scare? "sudden growth syndrome"? not complaining as generally speaking this is putting "carry" into the equity space (borrow short/lend long)...but maybe i've got too much rationality (as public policy) myself here. i really fail to see what "positivity" there is to look forward too other than outright default here as "interest rate risk returns with a vengeance." hmmm. "should be an interesting open in Japan this PM" (so to speak.) i will say this: the market is calling out the Fed that's fer sure. Japan lowered the boom last night. Will the Fed follow suit "for the rest of the year"? you all tell me....
China buys directly from the Treasury, you can thank Turbo Tax Timmah for that. They don't have to buy at auction through the primary dealers, their Central Bank is THE ONLY ONE that has this arrangement with the Treasury. Only the Treasury knows what they are buying and in turn the only way we know is those reports on who is holding how much debt. You'd assume the FED and primary dealers don't know what China is buying either but we know better than that since they are all propagated by the same crony club members.
The arrangement has been in place since June 2011.
I know it is yahoo and you'll be put into the NSA PRISM database but here is a story from 2012 about it.
http://finance.yahoo.com/blogs/daily-ticker/geithner-thinking-treasury-g...
"...with investors still demanding only 0.5% to hold 3 year paper it would appear that any fears of an imminent hike in rates ... is still far away."
Right now Dimon is trying to con the market into believing a rate hike will happen very soon. What a scammer...
I thought a rate hike already happened. They just forgot to tell Bernanke.
or Jamie Dimon for that matter.
If a rate hike were coming he sure the hell wouldn't talk about it to the press. He is just trying to conjure trading volume as are they all. Take another bonus from petty cash boyz.
Rate hike. LOL!!
Go ahead Ben raise rates, see what happens..
Don't talk about it, just do it.
Should only take about fifteen minutes.
DOW 12,000 here we come.
I wouldn't bet on that right now. Maybe in the far far future when Kito brings Fonz a cucumber sandwich whose contents have been grown on our collective ZH farm then perhaps you will be right.
Holy homo there goes the POMO. Kevin's system runs out of electrons.
http://www.youtube.com/watch?v=VSaDPc1Cs5U
10 yr futs are already giving back that yield spike for the day.
US events don't control this. Japanese events do.
What moron accepts .5% for 3 years when inflation is 10%? Something does not kompute.
Time for Bernanke to show his taperdance skills.
Ever since 1pm there has been a malfunction in the matrix.
Yes World, its all fixed..and there is a santa claus
JP Morgan's Dimon says US corporate world in fabulous shape and housing has turned the corner in every way
Says:
- Rates are going to go up in the US
- Sees no major acquisitions in bank's foreseeable future
- Trading revenue running a little better than expected
Looks like China has stepped away from the direct bid.
Look at this market gnash the bulls and bears in it's teeth. Wow.
It's freaking ugly.
Pssst. Someone tell FBN to change their header which now reads: "Wall Street Slides, But Trims Losses". Their current header should contain words/phrases like carnage, I see 'red people', blood seeping from every open orifice, or words to that effect.
I've got an old poker debt from 1966 of $2.65. Can I get a bailout from Mr. Fed?
House sales (and prices) sinking in my area. Must be the increased mortgage rates. Fundamental math; the rate rise from merely 3.25% to 4.25% means over $400 per month in mortgage payments for all those near zero down buyers with houses in the $600k range....wait until rates hit 7%.
This does not include the increases we're seeing in property taxes, maintenace, insurance, etc.
Fear seeping into the housing market silently...on little cat feet....
Dead cat bounce off a cliff?
Just had a good laugh. Maria Bartiromo just quoted as saying "this very unsual day on Wall Street". Financial press is even more irresponsible for their lousy reporting than Bernanke.
so if rates rise money will rotate into the equity markets, right? lol
Long jumpers