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Strong 3 Year Auction Prices At Highest Yield Since May 2011

Tyler Durden's picture




 

There may have been some concern about demand coming into today's 3 Year auction, however that promptly dissipated moments ago when the latest issuance of $29 billion in 3 Year paper priced at a yield of 0.928%, 0.3 bps though the 0.931% when issued, and a Bid to Cover of 3.401, the highest since February. Still, following recent concerns about the short-end of the Treasury market (recall the "dots"), this was the highest primary yield on 3 Year paper since May 2011, which has been creeping higher in recent months, surpassing the latest Taper Tantrum highs of September 2013. Dealers took down 47.4% of the auction, below the 49.4% TTM average, leaving 28.1% to Indirects and 24.5% to Directs, well above the TTM average of 16.6%.

In any case, yet another strong auction, and confirmation that for whatever reason, Treasurys, whether in the US, or Spain, or Italy, or wherever, have no problem with finding buyers (arguably, according to recent rumors, mostly of Japanese origin). Also, since the auction provided another boost to the entire TSY curve, it means the pain for stocks on this Turbo Tuesday, continues.

 

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Tue, 05/06/2014 - 13:14 | 4732410 LawsofPhysics
LawsofPhysics's picture

Do we still thank Belgium or some other E.Z. puppet state?  As an American I would like to think that we are polite if nothing else and would like to send a "thank you" note...

same as it ever was...

Tue, 05/06/2014 - 13:25 | 4732463 Soul Glow
Soul Glow's picture

Thank the IMF.  

Tue, 05/06/2014 - 13:16 | 4732417 Dr. Engali
Dr. Engali's picture

Who the hell knows who is buying what in this giant shell game? 

Tue, 05/06/2014 - 13:18 | 4732422 youngman
youngman's picture

It must be those hedge funds buying on behalf of the pension funds...lol...chasing returns...minus a large fee of course

Tue, 05/06/2014 - 13:18 | 4732425 FieldingMellish
FieldingMellish's picture

VIX hammer coming down but stawks ignoring?

Tue, 05/06/2014 - 13:21 | 4732445 Stoploss
Stoploss's picture

Every time one of these auctions goes like this you can expect shitty (er) housing numbers next report.

Tue, 05/06/2014 - 13:22 | 4732446 CrashisOptimistic
CrashisOptimistic's picture

New issuance is scarce.  Institutions have their bond portfolio and it's off the market.

Demand for more drives up the price for the remainder available and hence, yield falls.  And that demand comes from realization of poor or negative growth.

This is not rocket science.  YTD bonds have outperformed stocks.

Tue, 05/06/2014 - 13:25 | 4732464 Seasmoke
Seasmoke's picture

Great news for Gold.

/Sarc. (Although it shouldn't be a Sarc.)

Tue, 05/06/2014 - 13:28 | 4732479 CrashisOptimistic
CrashisOptimistic's picture

Jesus.

There is no mention of gold in the article.  And Tyler has pinned a gold article this morning for gold comments.

Why in hell would you spam on this thread?

Tue, 05/06/2014 - 13:28 | 4732476 Debeachesand Je...
Debeachesand Jerseyshores's picture

More Brussel Sprouts....

Tue, 05/06/2014 - 13:29 | 4732481 Soul Glow
Soul Glow's picture

The Direct bid - the Fed - came in large today.  Get that money, Yellen!

Tue, 05/06/2014 - 13:32 | 4732501 LawsofPhysics
LawsofPhysics's picture

yes.  the "indirects" are the only thing worth watching as the Primary Dealers are also the fed.

Tue, 05/06/2014 - 13:41 | 4732539 elwind45
elwind45's picture

I don't see bonds going much higher from here! I do however believe the movements in large physical shiny is set to make Putin happy and if he happy large money flows will calm down quite a bit and when he gets paid everyone in Europe parties! Too much pressure on long end is not a worry when everyone wants in dollars? And RUBLE

Tue, 05/06/2014 - 14:03 | 4732641 elwind45
elwind45's picture

I believe the BUD FOX of the future stocks sales force will call any elevated P.E levels the owning America premium when pushing stocks

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