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30 Year Auction Prices At Highest Yield Since July 2011
The 10 Year may so far be contained below its multi-year high of 3.00% hit in September just before Bernanke's "no taper" announcement, but the ultra long end, or the 30 Year, keeps dropping. Sure enough, moments ago the latest 30 Year reopening of 29 Year-11 Month CUSIP RD2 priced at a high yield of 3.900%. This may have been half a bp through the 3.905% When Issued, it still was the highest pricing yield on the 30 Year since July 2011, right before the US downgrade and the 20% S&P plunge resulting from the near debt ceiling breach. The Bid To Cover of 2.35 was modestly higher than last month's 2.16 but had a ways to go to catch up to the TTM average of 2.48. In terms of allotment, Indirects got the bulk of the auction, with 46% or the highest take down since April 2011. Directs were allotted 12.5%, or the lowest since June, which meant Dealers would have to "sell" back to the Fed 41.4% of the auction. So while not as immediately stirring as yesterday's very weak 10 Year, the sentiment toward the long end continues to deteriorate.
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Up, up and away in my beautiful, my beautiful balloon.
<For we can fly.>
http://www.youtube.com/watch?v=14IRDDnEPR4
Bond Bubble will make them all look like pikers
It would seem logical that bonds first begin to exhibit a permanence in higher yields starting with the longest-term bonds and then gradually moving to shorter & shorter maturities...if this has staying power, and later moves to the 10-year, it could be the beginning of something, and...
Something big is what I'm living for...yes, it's what I'm living for... (B. Bacharach)
wow, red all across, surprise, surprise, and the USD...
impaired:
all the elevators are connected; what makes one go up is another going down; the more the better, especially those which are unique, which act as multiplier effects.
No problem until China announces both of:
1. There are no restrictions on the international ownership and transfer of CNY;
2. There are no restrictions on the international ownership and transfer of Chinese government bonds.
After that announcement (within next six months, as the CB swap lines are already in place, and London is setting up for CNY clearing?) the US sky falls in.
Please don't say the Chinese won't do this because it will hurt their own holdings of UST's.
China isn't a democracy (and btw the US is, and yet do you think the Fed marks it's bonds to market?.
why are they waiting 6 months? they should do it in 6 hours.
this article has a small mistake - going into the 30yr auction...the wi was trading 3.89...and the auction came at 3.90...so it was a 1bp tail..which exactly explains where UB futures repriced to post-auction.