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Indirect Bidders Take More Than Half In Tailing 5 Year Treasury Auction

Tyler Durden's picture




 

Following yesterday's tailing 2 Year bond auction, moments ago the Treasury sold another $35 billion in 5 year paper which in today's soaring bond complex was expected to show scorching demand. Curiously, while the When Issued was trading 1.509%, the actual result showed a 0.4 bps tail at 1.513%, on par with yesterday's tail. Further adding to the weakness was the Bid to Cover which dipped from last month's 2.79 to 2.73, and the lowest since January, if modestly better than the TTM average of 2.65. The internals showed a shift away from Directs, whose take down was just 10.5%, below the TTM average of 13.0%, and down from April's 18.6%. This was compensated by Indirects who ended up with a majority, ot 50.4% of the auction, leaving 39.1% to Dealers, in line with the historical average.  So overall a mixed auction, and one which will likely keep traders scratching their heads as the ongoing strength in the secondary market refuses to relent.

 

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Wed, 05/28/2014 - 13:23 | 4802392 Count of Lastovo
Count of Lastovo's picture

What's the mystery?    Clearly those Belgians have sold enough waffles and fruity beer to buy US debt at any price.  

Wed, 05/28/2014 - 16:24 | 4802926 BuddyEffed
BuddyEffed's picture

Look for a new buyer soon, with equally well hidden string pulling as the Belgian thing standing naked by itself is too suspicious looking.  Tell Yellen I suggest South America this time.

Wed, 05/28/2014 - 16:25 | 4802931 BuddyEffed
BuddyEffed's picture

dup

Wed, 05/28/2014 - 13:24 | 4802399 viahj
viahj's picture

it appeasr that fiat will live to see another day.  fewer days ahead than behind.

Wed, 05/28/2014 - 14:35 | 4802601 Kaiser Sousa
Kaiser Sousa's picture

everything is fine...

now pledge allegiance to your flag...

Wed, 05/28/2014 - 15:36 | 4802793 DeusHedge
DeusHedge's picture

If indirect security purchases top 50%, we should be hearing about it.

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