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Foreign Demand For 3 Year Treasurys Highest In 5 Years
While not quite as brisk as last month's 3 Year auction, today's just concluded sale of $24 billion in 3 Year paper was very solid for one more month, with the High Yield pricing at 1.05%, an impressive 1.1 bps through the When Issued, even as the yield jumped from January's 0.926%.
The Bid to Cover, perhaps reflecting the extra pick of 12 bps in yield, rose ever so little, increasing from 3.330 to 3.345.
But it was the internals where as usual the action was, with the recent trend of collapsing Direct demand not disappointing, and in January only 7.2% of the final takedown when to Directs: the lowest since April 2012. The offset: a surge in the Indirects, typically foreign central banks, which ended up with 48.9% of the paper - the most since May of 2010!
We will leave the question as to just which NIRPing, foreign monetary institution was rushing to grab the "unheard" of yield of 1% for 3 Years (and 1% cash coupon) and arb the difference to local rates, open. The answer: most likely all of them.
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Paper Money at its best
The cleanest dirty shirt is beginning to smell a little like a turd. Time to print more US fiat to dilute the stench.
The stench is Obama's budget proposal.
would you rather get 1% from the good ol' usa, or would you rather get -.25% from a scandinavian country?
looks like you lose both ways.
Their both negative when one considers inflation and other factors. Better off with money in the mattress. At least you have it.
Of course there is demand, because the rest of the world is near zero for 2-3 year paper, which is where our bonds are going. Soon all paper will be a sick joke.
Thank you BenYellen.
Putting money in your mattress has been proven to providing better support for your back while sleeping.
China's back on the block. Hard to ween off the herion, isn't it China?
This is similar to falling threw lake ice on a chilly 14° F day, if you don’t get out quickly, hyperthermia will set in.
time to make those rates negative.
It's simple. Give Uncle Sam $1 and in 3 years you get a buck. Guaranteed.
Or
Buy $1 of gold flakes and get back 80 cents or less in 3 years.
Common sense.