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10 Year Auction Prices Over 3.00% For First Time Since May 2011

Tyler Durden's picture




 

With the 10 Year When Issued trading comfortably above 3% around the time of today's auction conclusion, it was expected that today we would see the first 10 Year auction, in the face of the WE6 9 Year 10 month reopening, pricing north of 3% for the first time since May 2011. Sure enough, moments ago the Treasury announced that it had sold $21 billion in benchmark paper at 3.009% tailing just slightly to the 3.007% When Issued. But while the yield was notable, the Bid To Cover actually picked up from last month's 2.61 rising to 2.68, almost exactly in line with the TTM average of 2.69, and showing a modestly increase in recent BTCs. The internals were a snoozers, with Dealers getting 39.8%, one percent above the 12 month average, Indirects were allotted 46.6% - below last month's 48.9% but above the 41.8% TTM average, and Directs got the balance, or 13.6% of the final allottment. Largely, a vanilla auction.

Perhaps the only notable item is to keep track of whether dealers sell it back to the Fed: during yesterday's POMO, even though the OTR WE6 CUSIP was not part of the exclusions, dealers sold precisely $0 back to the Fed. Now that they have another $8 billion of the issue, expect this to change at the first possible POMO opportunity.

 

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Wed, 01/08/2014 - 14:14 | 4312153 ebworthen
ebworthen's picture

C'mon 5%!!!

Wed, 01/08/2014 - 14:15 | 4312157 Seasmoke
Seasmoke's picture

Get to work Mr. Yellen. 

Wed, 01/08/2014 - 14:16 | 4312162 Soul Glow
Soul Glow's picture

He's gonna have to Un-Taper.

Wed, 01/08/2014 - 14:17 | 4312165 Grande Tetons
Grande Tetons's picture

 expect this to change at the first possible POMO opportunity.

Tomorrow's POMO looks relatively light for some reason. So, maybe another day. 

Wed, 01/08/2014 - 14:18 | 4312168 Rising Sun
Rising Sun's picture

POMO just got a little more expensive, didn't it Barry - you fucking asshole.

Wed, 01/08/2014 - 14:22 | 4312184 Dr. Engali
Dr. Engali's picture

Not when their cost basis for currency is zero.

Wed, 01/08/2014 - 14:42 | 4312276 Soul Glow
Soul Glow's picture

Everyone is getting a better deal on bonds at these prices.  I won't be surprised if they Un-Taper eventually but it might be creating a good buying oppurtunity for the Fed.

That or they are fucked and can't hold their bond buying program together.

Wed, 01/08/2014 - 15:11 | 4312442 LawsofPhysics
LawsofPhysics's picture

The supply of bonds and existing duration of outstanding debt might be important too.

Wed, 01/08/2014 - 15:40 | 4312551 Headbanger
Headbanger's picture

They are fucked....   NEXT!!!!

Wed, 01/08/2014 - 14:21 | 4312175 syntaxterror
syntaxterror's picture

"Do whatever it takes" Mr. Yellen.

Wed, 01/08/2014 - 14:21 | 4312180 Dr. Engali
Dr. Engali's picture

Why wouldn't the primaries sell previous issue now discounted 10 year notes to the fed at par?

Wed, 01/08/2014 - 14:22 | 4312183 IridiumRebel
IridiumRebel's picture

I really think this is the year that all Hell breaks loose.

Wed, 01/08/2014 - 14:24 | 4312193 LawsofPhysics
LawsofPhysics's picture

Been saying that since 1999 (when gold was under $300 an ounce).

Wed, 01/08/2014 - 14:23 | 4312187 LawsofPhysics
LawsofPhysics's picture

Primary dealers got a better deal? < shocker >

Wed, 01/08/2014 - 14:23 | 4312188 maskone909
maskone909's picture

that guy from shadow-stats thinks we blow up the currency first half of this year.

Wed, 01/08/2014 - 14:31 | 4312229 Soul Glow
Soul Glow's picture

John Williams, not to be mixed up with the duchebag John Williams from the San Fransisco Fed who said yesterday, "stocks are not overvalued".

Wed, 01/08/2014 - 16:38 | 4312748 Citxmech
Citxmech's picture

He's been saying that for a while though.

Wed, 01/08/2014 - 14:24 | 4312191 yogibear
yogibear's picture

The  Federal Reserve is being forced to buy ever-increasing amounts of treasuries.

Rates should look pretty steep by that time. Who cares, junk paper is junk paper, no matter what the rate is.

Wed, 01/08/2014 - 14:28 | 4312205 Soul Glow
Soul Glow's picture

Perhaps the only notable item is to keep track of whether dealers sell it back to the Fed: during yesterday's POMO, even though the OTR WE6 CUSIP was not part of the exclusions, dealers sold precisely $0 back to the Fed.

Maybe the Fed has decided to let rates rise.

Wed, 01/08/2014 - 14:28 | 4312206 Sufiy
Sufiy's picture


Alasdair Macleod: Currency Crisis And Gold

 Alasdair Macleod has come out with interesting new way to measure the potential value of Gold. Nobody is interested in Gold now ... apart from China which was buying the record amount of Gold last year. Bitcoin crowd are still happy chasing the Bubbles and 10Y Yield are above 3.0% today again.

 

http://sufiy.blogspot.co.uk/2014/01/alasdair-macleod-currency-crisis-and...

Wed, 01/08/2014 - 14:35 | 4312248 GrinandBearit
GrinandBearit's picture

4% by March.

Wed, 01/08/2014 - 16:53 | 4312800 Citxmech
Citxmech's picture

If so - then inflation will likely surpass 20% as they try to print the problem away.

Wed, 01/08/2014 - 14:37 | 4312264 wisehiney
wisehiney's picture

The funds raised from selling bonds buy stocks. Selling bonds increases costs on overleveraged world. STALEMATE!

(Sharks die if they do not keep moving)

Wed, 01/08/2014 - 14:38 | 4312268 Spungo
Spungo's picture

Raise interest rates to 5%, the tighter budget eliminates social security and EBT cards, people riot, DHS gets to use humans for target practice with those billions of bullets they purchased.

Wed, 01/08/2014 - 14:56 | 4312354 Sleepless Knight
Sleepless Knight's picture

Now serious talk amoungst banksters of a bail in to cover the added cost of going over 3%.

Wed, 01/08/2014 - 15:51 | 4312591 F em all but 6
F em all but 6's picture

tick tick tick........

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