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5 Year Auction Yield Tumbles To Lowest Since May 2013

Submitted by Tyler Durden on 01/29/2015 12:43 -0400

As we previously noted, yesterday's 2 Year auction was an absolute blockbuster and accurately guessed the general direction of the bond market following yesterday's FOMC announcement. Moments ago, the US Treasury sold $35 billion in 5 Year paper, the first of two Note auctions, with the 7 Year due at 1pm today, and like yesterday it too was a very strong auction, with the High Yield tumbling from 1.739% last month, when most were assuming a rate hike is imminent to just 1.288%, stopping through the 1.295% When Issued, and suggesting that the relentless collateral shortage of the past 2 years simply refuses to go away. This was also the lowest closing yield of a 5 Year auction since May 2013.

The Bid to Cover rose modestly from 2.39 to 2.49 (below the 2.72 TTM) but it was a far cry from the BTC surge during yesterday's 2 Year issuance. However, the real action was in the internals where just like yesterday the Directs remained under 10%, allowing the Indirect take down to surge to 63.1%, leaving only 27.4% for the dealers.

Altogether, a strong showing for the first left of the belly auction for today, and if this is any indication expect a 7 Year auction in 90 minutes to also price stopping well through whatever the When Issued is trading at around 1pm.

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Thu, 01/29/2015 - 12:45 | 5720384 PartysOver

Bullish!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

forgot the <sarc>, sorry

Thu, 01/29/2015 - 13:00 | 5720462 knukles

Collateral shortage?
Y'all ain't seen 'nuffin' yet.
Just wait till all sorts of swaps and the like demand additional collateral posting. And yer favorite counter-parties (thems wif brains, like Goldilocks) ain't gonna take any crap credits. Gubamints, folks. They gonna be wantin' gubamints.

Lots and lots of gubamnits

Thu, 01/29/2015 - 14:33 | 5721060 KnuckleDragger-X

Everybody has been over-leveraged, so heavily, for so long that everybody owes everybody...plus interest. And just because we're special, we have CDS and derivative paper floating around for hundreds of trillions. This ain't gonna end well.....

Thu, 01/29/2015 - 14:41 | 5721103 SamAdams

it's getting mighty bubbly around here....

Thu, 01/29/2015 - 12:46 | 5720395 Kaiser Sousa

hope u guys r enjoying the operation in the phony paper Silver market price...

i mean how fucking stupid is this shit.....

http://www.kitco.com/charts/livesilver.html

Thu, 01/29/2015 - 12:52 | 5720415 Creepy A. Cracker

Mind boggling. Then one remembers that central banks must NOT allow silver and gold to gain strength against their printed paper.

Thu, 01/29/2015 - 12:56 | 5720432 NotApplicable

It will be interesting once they drive the price down low enough that all physical either disappears, or is only offered with ever escalating premiums.

Thu, 01/29/2015 - 13:04 | 5720482 Alea Iactaest

They way gold and silver keep getting smashed down, you might start to think they are important.

The fact that MarketWatch lists the PoG on its front page, right under the major stock indexes and above oil, you might start to think that it's important.

The trouble that Germany has had repatriating its gold, you might start to think that it's important.

The fact that central bankers can't print PMs, you might start to think that they're important.

Nah, who am I kidding.

Thu, 01/29/2015 - 13:12 | 5720524 maskone909

cash for gold on every corner- might think its important

why did the black man wear a suit to his visectomy?

"well i thot if i should be impotant, i should look impotant"

keith hennings told me that joke

Thu, 01/29/2015 - 13:35 | 5720714 max2205

PMs don't do well in a depression

Thu, 01/29/2015 - 13:08 | 5720503 maskone909

shocked it wasnt 5 years ago

Thu, 01/29/2015 - 13:10 | 5720511 bbq on whitehou...

Its not just gold that will vanish in favor of paper, but all US industry. Agraculture is soon to follow and all the expensive farmland will go fallow. Banks will get the land and the money. Money money everywhere and not a thing to buy.

Thu, 01/29/2015 - 12:49 | 5720410 Creepy A. Cracker

BULLISH!!!

<sigh...>

Thu, 01/29/2015 - 12:51 | 5720417 ZoroAustrian