This page has been archived and commenting is disabled.
Stellar 10 Year Reopening Closes At Lowest Yield Since June 2013, Highest Indirects Since December 2011
Another 10 Year auction (or technically 9 Year, 11 Month reopening), and another round of blistering demand by the Indirects.
With the When Issued trading at the lowest since the June 2013 high yield, today's 10 Year issuance did not disappoint, and at a 2.214% High Yield, the 10Y priced just through the when issued which was at 2.215% at 1 pm, making this third consecutive month of declining 10 Year yields (and the lowest in 18 months). The Bid To Cover sizzled, surging from last month's 2.52 to 2.97, the highest since March of 2013. The internals saw Indirect demand surge to 53.8%, the highest since December of 2011, however offset by Directs of just 6.9%. Dealers took the remaining 39.3%.
In short: the scramble to procure high quality collateral continues, with Dealers and foreign nations both eager to get their hands on whatever is available in the primary market.
»
- 1904 reads
- Printer-friendly version
- Send to friend
- advertisements -
sounds Tepperish ..
http://hedgeaccordingly.com/2014/09/david-tepper-its-the-beginning-of-th...
Just remember that there is no risk in US treasuries as US debt is only $18 trillion and rising at only $1 trillion a year and US unfunded liabilities are at least $130 trillion and rising at only $7 trillion a year. What can go wrong in 10 years as you collect 2.214% a year for 10 years? There is no chance that the US dollar could depreciate by 25% under the burden of heavy debt, endless wars, unemployment and financial collapse engendered by infinite Fed manipulation.
It's more about what could go wrong for your hedge fund in the next 10 days as you fail to meet margin calls for good collateral against your energy high-yield positions.
Except for the war part, I heard something similar about 10yr JGB's over ten years ago, which today yield only 0.41%.
God help you if you're shorting this market!
Where can I get some of this 0% free money? I wanna know cause I need to upgrade my Obama phone.
Yields will find a bottom in the current wave and start a skyrocket upward that will shock and awe the equity and bond markets alike. The 10 YR will bring down the housing market as a result...
http://www.globaldeflationnews.com/10-yr-u-s-treasury-index-yieldelliott...
Not a chance -
when the short end yields rise, the 30-2yr and 10-2yr spread will flatten towards zero. It is historical fact.
we will see an inverted yield curve before we see the 10yr skyrocket.
NoVa
Does anyone know if there is a good tutorial on these treasury auctions - I've tried to understand them but would love a layman's explanation of directs, indirects, dealers, bid to cover, etc. - sAusAge
We were at three percent heading to four just one year ago.
"Not anymore."
probably the best tip taught to me was to understand the fear of the various bidders (Directs and InDirects) in the auction. What, who and why are they buying -
Also - no one entity or groups of entities control the long end of the Treasuries. Market forces are too powerful.
There are armies of very smart quant jocks reading their terminals every minute, reviewing tick movements, arbitrages, trade volume flows, etc.... I have 3 guys on my trade desk at my firm.
I sort of understand fixed income markets, and I would never compete against my traders or their peers. They have way too much knowledge earned from hand-to-hand combat of trading.
Good Luck,
NoVa
hello Belgium....
"In short: the scramble to procure high quality collateral continues, with Dealers and foreign nations both eager to get their hands on whatever is available in the primary market."
This^.
The incipient high-yield debacle, oil and the stress in Greece and EM are all causing a scramble for year-end good collateral to balance the books.
Santa has left the building it would appear to meet his margin calls.
Where's the MSM on the markets today?
Crickets...chirp...chirp...chirp.
What happens when the Fed. meets next week and they see bond yields this low? What happens if they make a dovish statement and the $usd takes a huge fat steaming dump?
Yea right dipshit junkster. The 5year is pricing just over 1.2% inflation and hit 2009 lows this morning. Good luck on that $ long trade asshat.