Bonds Burned By Ugly, Tailing 30 Year Auction
Following the 3 and 10 year auctions in the last two days, today's 30 Year $13 billion reopening completed the trifecta of ugliness, pricing at a surprisingly wide 3.355%, or three whole basis points above the When Issued, which traded at 3.324% at 1pm - the biggest tail in a long time. It was also the highest yield for a 30 Year since March 2012. The internals were not pretty either - the Bid To Cover coming at 2.47, well below the TTM average of 2.59 but hardly the massive BTC collapse that we saw in yesterday's 10 Year. And just like yesterday, the Directs ran for the hills taking down just 8.5%, compared to 15.2% in the past year average, Indirects taking 40.2% and 51.3% or so left for the Dealers who will be happy to stock up on some more collateral.
The treasury complex was not happy with the auction, and sold off promptly as a result.
Equities, on the other hand, which today are stuck in one big upside stop hunt phase, are completely clueless as to what to do here, and are ignoring the primary signal that in the past several weeks - rising rates - has pushed them lower. Oh well - E-Trade babies and such.