Indirect Bidders Show Strong Appetite For 2 Year Bond Auction

Tyler Durden's picture

Today's auction of $32 billion in near-cash equivalent 2 Year paper was hardly remarkable. The yield was a somnolent 0.34%, pricing through the 0.343% When Issued courtesy of a strong bid in bonds all day (ignoring the ongoing idiocy of the stock market), below last month's 0.38% and just modestly above the 0.32% average, which means that despite all the posturing, few are actually expecting the Fed to do much to short-end rates in the next two years. The Bid to Cover did post a bounce to 3.605, above last month's 3.30, and above the trailing 12 month average which was also 3.30. Perhaps the only thing of note was that the Indirect bid jumped from 28.5% to 34.3%, the highest since June's 35.83% and well above the 24.7% average, and with Directs taking down 19.3%, it meant that Dealers were stuck with just 46.4%, below the 52.3% 12MMA and the lowest since October.

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SAT 800's picture

Indirect bidders with "strong appetite"; can be summed up as "Suckers". On a lighter note, I bought back my Natural Gas Contracts this morning for +$16,000, BennyBux. At one time they were $20,000 underwater on paper; sometimes you have to be tough and stubborn; but not very often.

greatbeard's picture

I've lost a good bit of jack being tough and stubborn so now I'm a chicken shit on the sidelines.  I like seeing guys like you skim some for themselves.  Congrats.

SAT 800's picture

Yeah, I'm almost sorry I posted that. Normally, like 99% of the time, you have to take your first loss; and be alive to try another day. The main difference between people who do this as a business and people who just make losses is the concept of the stop loss. The reason this was different is that it's a deliverable market; there's real Natural Gas involved, one can see the manipulation in the price, and the March contract closes out three days before March starts delivery, three days before the end of February. I knew they couldn't just keep bullshitting because it was all going to get real in a few days. On other markets, like Silver, for instance, I tried in my youth to wait for the market to see the wisdom of my opinion and got beat up really bad.

yogibear's picture

"Indirect Bidders Show Strong Appetite For 2 Year Bond Auction"

Like sewage eating bacteria.

elwind45's picture

The only thing stuck is the narrative?