Weak Reception For Latest Batch Of $16 Billion In 30 Year Paper

If yesterday's 10 Year auction was a success, today's $16 billion issue of 30 Year paper was poorly received by the market, with the 3.810% yield tailing the 3.796% When Issued, accentuated by a tumble in the Bid To Cover from 2.64 to 2.16, the third lowest in the past 4 years, excluding just the auctions from August of 2011 and 2013 when there was led indicated demand. The internals were less remarkable, with Directs taking down a stronger than average 18.3%, Indirects holding 35.3% of the auction and Dealers left with 46.5% of the auction. Overall, hardly the ringing endorsement in the long-end the Treasury needs.

Perhaps in retrospect this weak auction is not that surprising. As we pointed out earlier, hedge funds have the most conviction in this "asset class" second only to the Nasdaq. And you know what they say about the herd...

Comments

[ebworthen]

The FED will be like the fat person trying to play "Twister" with hands and feet on the long and short end of the colored circles trying to buy all the Treasury paper.

Can't wait to see them fall down in a heap.

[maskone909]

thanks for the visual of mr yellen as you stated

[firstdivision]

At least we know what is driving today's equity price http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1384462800000&chddm=1165.9999999999997&chls=IntervalBasedLine&cmpto=NYSEARCA:USO;NYSEARCA:XIV&cmptdms=0;0&q=NYSEARCA:SPY&&fct=big&ei=IxOFUrj_B-O20AH_7wE

[pods]

Can we just replace "Dealers" with the "FED" now?  That is where they are going. Let's drop the middleman.

pods

[yogibear]

We will go up from the Fed owing more than 30% of the 10 year paper to 50% and higher quickly.

[joego1]

Look the snake is eating it's tail!

[NOTaREALmerican]

Hedge fund convictions by asset class.

If only that headline were true.

[Lin S]

The ship is taking on more water.  What should we do about it?   Hmmm...

Hey, are those Cheetos?

[LawsofPhysics]

Allow treasuries to be purchased with bitcoins, problem solved.

/s