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First Post-Taper 3 Year Auction Yield Approaches September Highs, Bid To Cover Drops, Directs Spike
Back in September, just before the FOMC announcement in which Bernanke shocked everyone by not announcing a Taper, the 3 Year priced in the early part of the month at a yield of 0.913%: the highest since May 2011. After that, following the delay of the taper, yields dipped, but are once again rising higher, and moments ago the $30 billion 3 Year auction priced - in the first post-taper auction - at a high yield of 0.799%, a jump from the December 0.631%, and a tiny tail to the When Issued stopping at 0.797%, but still shy of the September wides.
Also of note: last month's jump in the Bid to Cover, which had risen to 3.553, is once again declining, and today printed at 3.255 below the TTM average of 3.349. The internals were notable for the dramatic spike in Direct Bids, whose takedown doubled from 12% in December to 22.6%, the highest since Marh 2013 when Directs were buying the short end with reckless abandon. And with Indirects taking down a lowly 28% (compared to the TTM average of 30.5%), this means Dealers were once again left holding just half of the bag, or 49.4% compared to 49.6% last month. Altogether, a "normal" auction, but keep an eye on those creeping higher yields. Should the Fed continue to signal tapering in the coming months, expect the yield to hit 1% at some point in the coming 3-6 months.
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the yellenator will buy them.
Isn't "Post-Taper" a bit premature?
I should buy bonds so I can burn them to try to stay warm in this deep freeze today. That's all they're good for, right?
Who needs POMO to drive the markets even higher into the stratosphere, when you have 'Temporary Open Market Operations' numbers like these. The numbers are truly staggering!
YC
Good calls on your pre holiday trades. Congrats. Took my AUD/JPY off at 94...good thing.
Watching NZD/USD...seems to be the fundamentals are a little too priced in and the bulls may be loosing steam IMO. Are you seeing the same thing?
Thanks. It's not one of the pairs I trade, so I don't have a feel for it. I'm long aud/usd currently though, if that helps. There's a good sized macro release from the PBoC and RBA later today, so I might lighten up a bit before.
I'm short CABLE and doing alright so far. I bought into the strong dollar scenario temporarily. I dropped my long AUD position at even for non-performance; also, as I say, I decided I liked the strong dollar argument.
I want you to take a very close look at this picture: http://zeenews.india.com/news/space/orbital-sciences-antares-launch-sche... "that ain't Cape Canaveral" in case you're wondering. That's "just some beach in Virginia" just up the road from where the Wright Brothers flew their first plane. Here's the bio on Orbital Sciences: http://en.wikipedia.org/wiki/Orbital_Sciences_Corporation "only been around since 1980" with hundreds of successful missions flown to space. this is all while the taxpayer was getting hosed to tune of hundreds of billions. Interestingly "the State of Florida might want to be gifted the NASA complex" if it means they'll become the biggest mining company on the face of the earth. http://www.youtube.com/watch?v=ELcTJZLxhFU the ticker symbol is "Orb" in case you want to go long mining in a whole 'nother direction. still has to be refined of course..."or you can spent the rest of your life listening to William Cuntsler and his worthless blather." Next up "air strikes against Sophia." let's see how the the Olympics does when Genghis Khan shows up for the Party....
Still short ZB, the Long Bond contract; hasn't really moved yet; but it's not doing me any harm. I'll keep it and roll it over till Christmas if I con't get stopped out.
"Altogether, a "normal" auction, but keep an eye on those creeping higher yields." ???
Anyone not keeping an eye on creeping yields please touch a nearby creep who is.