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Treasury Yields Rise Most In 9 Months, Weak 7 Year Auction Does Not Help

Tyler Durden's picture




 

Treasury yields are surging across the complex with the long-end steepening notably. Today's 10.5bps jump in 10Y yields is the biggest percentage shift since early November 2013... and a significant tail in the 7Y auction just made things worse.

The long-end is suffering most...

 

But the selling is across the complex...

 

It is unclear how much of today's bond sell-off was a factor in the just concluded 7 Year Treasury offering, but what is clear is that unlike yesterday's strong 5 Year issuance, today's auction was disappointing, starting with the High Yield of 2.25%, the highest since April's 2.32% and tailing the 2.24% When Issued by 1 bp. And while the Bid to Cover was a slight improvement from last month's 2.435 rising to 2.581, it was the internals where we saw a flight of Direct bidders, who only took down 15.2% of the auction. This was the lowest allotment since July 2012. The offset: a pick up by Indirects from 40.6% to 47.4% while Dealers ended up with 37.4% of the auction.

Regardless of the auction one thing is clear, the shorting of bonds today will continue until the squeeze, as has been the case for all of 2014, returns.

 

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Wed, 07/30/2014 - 13:19 | 5023226 q99x2
q99x2's picture

Trade ya a tranny for 2 big tails.

Wed, 07/30/2014 - 13:32 | 5023277 Publicus
Publicus's picture

Russia is liquidating.

Wed, 07/30/2014 - 13:19 | 5023227 LawsofPhysics
LawsofPhysics's picture

"Bond Vigilantes"...

 

LMFAO!!

Wed, 07/30/2014 - 13:19 | 5023230 fonzannoon
fonzannoon's picture

look at U.S Steel today. Ho Lee Fuk

Wed, 07/30/2014 - 13:24 | 5023246 walküre
walküre's picture

Do they have a pipeline contract or are they benefiting from sanctions on Russian imports? Could be they're retooling for a massive war effort?

Wed, 07/30/2014 - 13:30 | 5023270 fonzannoon
fonzannoon's picture

They are a heavily shorted piece of shit. all they needed to do was barely fart out something positive to set off a massive squeeze.

Wed, 07/30/2014 - 13:44 | 5023329 walküre
walküre's picture

Fantastic. Just another day in the zoo.

Wed, 07/30/2014 - 13:20 | 5023231 Xibalba
Xibalba's picture

hook 'em with an 18mo 0% interest card and then WHAM! 

Wed, 07/30/2014 - 13:20 | 5023233 Jack Sheet
Jack Sheet's picture

full faith and credit...

Wed, 07/30/2014 - 13:22 | 5023239 SheepDog-One
SheepDog-One's picture

Raise rates in 3....2....1....right?

Wed, 07/30/2014 - 13:26 | 5023251 Al Huxley
Al Huxley's picture

I'm just looking forward to the Market Update and Hot Money Stock Tips report from Yellen Capital LLC.  I know this is off-topic, but it would be great if they could extend their coverage to include some kind of 'Lottery Ticket' pix - high risk, big payoff type items - you know, like if they could have tipped CYNK before it took off there, that would have been pretty awesome.  I just hope their CEO and head trader Janet is reading this and takes the suggestion into consideration.

Wed, 07/30/2014 - 13:27 | 5023261 Tjeff1
Tjeff1's picture

flat and getting flatter.

Wed, 07/30/2014 - 13:31 | 5023274 PlusTic
PlusTic's picture

10 Bps rip in yields on a fake number while the country is in a disguised depression...something is seriously wrong with this picture

Wed, 07/30/2014 - 13:34 | 5023285 Bill of Rights
Bill of Rights's picture

It is becoming clear that the present methodology for calculating GDP is becoming increasingly less relevant as a measure of the economy. M3 was dropped for less.

M3 therefore was dropped for a reason.....They knew what was coming, Massive amounts of money printing. The Conspiracy theories are all coming to the surface now.

 

Wed, 07/30/2014 - 13:49 | 5023348 Dr. Engali
Dr. Engali's picture

^^ This...... You're exactly right. When they decided to drop M3, you knew something was up.

Wed, 07/30/2014 - 13:48 | 5023344 Dr. Engali
Dr. Engali's picture

BTFTD...... by the fucking treasury dip.

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