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Weak 10 Year Auction Prices With 0.9 bp Tail On Lowest Indirect Demand In Over A Year

Tyler Durden's picture


Almost as if by design, moments ago today's 10 Year reopening (Cusip WJ5) priced at 2.648%, above May's 2.61%, and some 0.9 bps above the When Issued 2.639% driven by a big drop off in Indirect demand. The Bid to Cover was actually a stable 2.88 the highest since March, and well above the 2.65 average in the past year which likely was the result of the higher than expected high yield. But it was the internals where the action was with Indirect demand tumbling from 49.3% to 36.1%, the lowest since May, while Directs were relatively flat at 19.%, down from 21.6%, as Dealers had to pick up their buying and take down some 44.5% of the auction: the most also since May 2013. And with everyone paying attention to bonds, the curve was certainly not happy with the weakness in today's much watched benchmark auction, with the kneejerk reaction certainly indicating more weakness may be in store for the bond complex.


Bonds reacted negatively (as expected) to the tail but remain unch on the day...

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Wed, 06/11/2014 - 13:20 | 4845298 Dr. Engali
Dr. Engali's picture

Belgium must have skipped out today.

Wed, 06/11/2014 - 13:23 | 4845313 yogibear
yogibear's picture

The Fed member responsible for buying through the Belgium account must be on vacation.

Wed, 06/11/2014 - 13:22 | 4845314 Four chan
Four chan's picture

from record demand to underdemand and back, i beginning to think none of this matters.

Wed, 06/11/2014 - 13:23 | 4845320 LawsofPhysics
LawsofPhysics's picture

There is no "taper"...

hedge accordingly.

Wed, 06/11/2014 - 13:38 | 4845386 buzzsaw99
buzzsaw99's picture

this too is bullish

Wed, 06/11/2014 - 13:40 | 4845389 SheepDog-One
SheepDog-One's picture

PAPER for sale! Get ya hot worthless stinky gubmint PAPER right here!

Wed, 06/11/2014 - 13:38 | 4845390 madbraz
madbraz's picture

Indirect demand did not drop, they placed $14.4 billion in bids in June versus $13.9 billion in May.  They didn't get as much because their bids were too low (higher yield), but indirect demand was strong.



Wed, 06/11/2014 - 13:39 | 4845396 youngman
youngman's picture

I thought everyone was buying stocks...or is that just all of the corporate buybacs

Wed, 06/11/2014 - 13:50 | 4845445 q99x2
q99x2's picture

You get Brussels on the horn. Yellen will buy em up out of her back end.

Wed, 06/11/2014 - 15:06 | 4845743 canonball
canonball's picture

Has anyone found a more recent legitimate source of the Belgium buying? Its euroclear but whom using the clearing house?

Wed, 06/11/2014 - 15:06 | 4845744 canonball
canonball's picture

Has anyone found a more recent legitimate source of the Belgium buying? Its euroclear but whom using the clearing house?

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