Blistering Demand For 30 Year Treasury Paper
If yesterday's 10 Year reopening was a ho-hum auction with no surprises, today's surging stock market has translated into blistering demand for 30 Year US government paper, when moments ago the Treasury sold $13 billion in the RC4 reopening of 29-Year 10-Months, at a yield of 3.758 (with 78.4% allotted at the high), nearly a stunning 3 bps through the 3.781% When Issued, which has led to the long end ripping tighter following the news. The internals were quite as impressive: The Bid To Cover of 2.64 was the highest since February and well above the TTM average of 2.51, Directs were awarded a whopping 22.6%, the most since June 2012, Indirects got 41.9% - the most since March, while Dealers were stuck holding just 35.5%, or the least since August 2010 as seemingly everyone else wanted a piece of this auction first. So why are bonds and stock surging at the same time? Either there is a major short-covering relief rally across all asset classes as the government may not be defaulting in one week, or just the amount of pent up liquidity as a result of the ongoing Fed monetizations is so desperate to find a place to go, it will jump even into conflicting asset classes.
- advertisements -