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10 Year Auction Reopens At Highest Yield Since October 2011, Lowest Bid To Cover Since August

Tyler Durden's picture


Following yesterday's ugly 3 Year auction, some were worried the bond market weakness could spill over to today's benchmark 10 Year reopening of $21 billion in paper. It prices just through the When Issued of 2.210%, or at 2.209%, a little better than expected, although the highest yield since October of 2011. So while the demand on the surface was sufficient, the Bid to Cover, which dropped to only 2.53, below last month's 2.70, well below the TTM average of 2.92, and the lowest since August of 2012 when the BTC came at 2.49. Nonetheless, the downward slope in the BTC curve in both the 3 and 10 Year auctions is quite visible. In terms of takedown, there was a surprise as the Indirects took down a whopping 51.7%, the highest since December of 2011 when they were left with 61.9%. And while Dealers ended up with just 36.6% it was the Directs that had the smallest allocation, or 11.7%, since September of last year. Perhaps Dealers are now masking as Indirect. Either way, the good news is that with the reopening, dealers should have some additional collateral for a while, or at least until the Fed monetizes it. Look for this CUSIP - VB3 (On The Run) to remain on the POMO exclusion lists for white a while.


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Wed, 06/12/2013 - 13:16 | 3650607 observer007
observer007's picture

Zulauf: Bubble Will Burst In Two Years

Felix Zulauf:


  • What could happen if the real global economy does not react to the monetary stimulus and what could happen to equity markets when investors wake up one morning realizing that money printing does not work in the real economy?
  • There simply is no free lunch, even though our alchemists at central banks may make some believe it. In some cases, debt restructuring will be inevitable.
  • Once equity markets discover the emperor has no clothes, they could face a quick and painful adjustment"

Full Text:

Wed, 06/12/2013 - 13:20 | 3650619 johny2
johny2's picture

inflation is visible in cost of most of the things, wages being one of the few exceptions. surely this is excelent news for any central banker.

Wed, 06/12/2013 - 13:20 | 3650621 max2205
max2205's picture

nice inverse H&S there

Wed, 06/12/2013 - 13:21 | 3650622 Bay of Pigs
Bay of Pigs's picture

"Apparently, it was good enough"

BlowHorn (on the auction)

Wed, 06/12/2013 - 13:42 | 3650700 CheapBastard
CheapBastard's picture

Housing market is going to get real Ugly as mortgage rates rise and house sales (and prices) plunge.

Wed, 06/12/2013 - 13:47 | 3650720 vote_libertaria...
vote_libertarian_party's picture

aaaand Treasuries get bid up a little on the weak-ish auction....huh???

Wed, 06/12/2013 - 13:51 | 3650736 walküre
walküre's picture

Fascist Bank (Fed) prints USSA paper money to buy USSA paper debt and keeps the fascist state alive including all the state oppression instruments it created.

What's not to love.



Wed, 06/12/2013 - 14:07 | 3650804 disabledvet
disabledvet's picture

is the Government/can the Government be compelled to pay interest...on anything financial asset in their possession? hmmmm. hmmm. "former managing director of the IMF" as well. any American's qualified for that job? (i can only think of one actually...and needless to say he's not in Government nor interested in a Government job.) "just print MOAR does not qualify you for that position." these folks have to make hard choices about Large Numbers of People. He's one of the more interesting ones actually...and he did appear "from out of nowhere" just the other night. and we do have the FOMC it tomorrow? nope, next week.

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