Blistering Demand For 30 Year Paper; Lowest Yield Since May 2013; Directs Strongest Since 2011

Tyler Durden's picture

The only word to describe today's just concluded, and final for the week, auction of 30 Year paper can only be described with one word: blistering. First, the pricing yield itself, coming at 3.224% a whopping 2.5 bps through the When Issued, was the lowest since May 2013, just before the first Taper tantrum which sent yield surging only to regain all Ultra losses in the next year.

The Bid To Cover also jumped from last month's 2.40 to 2.60, and well above the 2.37% TTM average. Finally, the internals showed the highest Direct takedown, at 24.4% since October 2011, leaving some 45.9% of the auction to Indirects, and Dealers left with just 29.8%, the second lowest in history (only higher than June's 26.5%). In other words: while stocks continue to pound the table on imminent growth, bonds are seeing just the opposite. Unless, of course, both stocks and bonds are focusing on just one thing: far more easing from either the ECB, PBOC or, ultimately, the Fed once the whole "taper" thing is inevitably replaced by the untaper.

Needless to say, the response across the curve to this ultra strong, pardon the pun, auction has been swift and sharp, with buying across the long end, the 10Y yield dropping to LOD, and the 30 year also trading at session lows of 3.202%.