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2 Year Paper Sold At Highest Bid To Cover Since May As Yield Declines, Lowest Directs Since June 2013

Tyler Durden's picture




 

If there is any concern of massive curve flattening, or even inversion, the bond market sure wasn't aware of it today when moments ago some $29 billion in 2 Year bonds were sold at a yield of 0.530%, stopping through the 0.532% When Issued, and below the 0.544% from last month which was the highest since May 2011.

The Bid to Cover rose from 3.220 to 3.479%, the highest since May's 3.519%, and certainly not hitting of any lack of demand for the short-end. The internals showed a marked move away from Directs, who took down just 12.14% of the auction, half of the TTM average of 23.4% and the lowest since June 2013, however this was more than offset by the surge in Indirects, whose 39.8% was the highest since March when they were allotted 40.93%. Finally, Dealers were left holding less than half of the bag, or 48.0%, only the first time PDs ended up with less than half the auction since March 2014. Overall, a rather strong auction, as can be further validated by looking at the move tighter across the curve.

 

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Tue, 08/26/2014 - 13:14 | 5145588 LawsofPhysics
LawsofPhysics's picture

"Rising rates"....

any second now, we promise...

Tue, 08/26/2014 - 13:18 | 5145621 Tenshin Headache
Tenshin Headache's picture

Lots of money looking to get out of the Euro atm.

Tue, 08/26/2014 - 13:50 | 5145759 walküre
walküre's picture

There just aren't enough Bunds to come by

Tue, 08/26/2014 - 13:21 | 5145626 youngman
youngman's picture

I hope its not Pension funds.....there is going to be some pensioners shorted in the future....

Tue, 08/26/2014 - 13:41 | 5145716 Save_America1st
Save_America1st's picture

wow....ya know, it's almost as if some entity that has the ability to create digital dollars out of thin air with their majical com-pew-tor is buying everything up to create an illusion of healthy markets.....

nahhhh....I'm sure that would never happen.

Tue, 08/26/2014 - 13:51 | 5145765 NotApplicable
NotApplicable's picture

These bond "auction" charts are the most comical ones here at ZH. Every color I look at equals "central bank proxy."

100%

Tue, 08/26/2014 - 15:54 | 5146302 Zirpedge
Zirpedge's picture

Sorry guys, still stackin trasuries hand over fist. MyRA is blowin up son!

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