This page has been archived and commenting is disabled.

Shorts Burned Following Strong 5 Year Treasury Auction

Tyler Durden's picture




 

If yesterday's strong 2 Year bond auction confirmed that there was not a hawkish cloud on the bond market's horizon, then today's just concluded 5 Year bond auction doubled down on the strength of the short-end, when moments ago the Treasury sold $35 billion in 5 year paper at a yield of 1.480%, stopping 0.3 bps through the 1.483% when issued. The Bid to Cover of 2.54 also posted a modest increase to last month's 2.49, if a below the TTM average of 2.71. The internals were also in line, with Directs getting 7.5%, Indirects a far stronger than average 60.1%, and Dealers left holding 32.4% of the auction.

 

And with the auction behind us, the question now whether the surge in the short interest ahead of both the 2 Year and 5 Year auction, as confirmed by the collapse of repo rates, with both the 2 Year and the 5 Year trading super special in the past few days...

... will once again book losses and admit that this, yet again, is not the inflection point, launching the latest short-end short covering rally?

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 02/25/2015 - 14:17 | 5827787 OldPhart
OldPhart's picture

What is the significance of those negative rates?

Wed, 02/25/2015 - 14:23 | 5827818 kaiserhoff
kaiserhoff's picture

And in other news, water is wet.

Everybody wants bonds until the second they go NO BID, tits up.

Anyone else remember 2008?

Wed, 02/25/2015 - 14:43 | 5827925 Miffed Microbio...
Miffed Microbiologist's picture

May be its like the Lotto slogan. You can't win if you don't play.

Miffed;-)

Wed, 02/25/2015 - 14:51 | 5827965 disabledvet
disabledvet's picture

From Jackpot! to "Jack's pot" in a New York minute.

Wed, 02/25/2015 - 14:53 | 5827968 LawsofPhysics
LawsofPhysics's picture

I thought 2008 was the opposite...  Dark pools gtting a margin call and no "high quality" collateral to be found anywhere...

oh wait...

so this time the bonds will really go "no bid"...

John Corzine, is that you?

As far as I can tell the very same central bankers and financiers are alive and well you dumb fuck.

Wed, 02/25/2015 - 14:39 | 5827907 disabledvet
disabledvet's picture

If you are short your losses can be infinity.

 

"And beyond" apparently...

Wed, 02/25/2015 - 14:18 | 5827789 Thirst Mutilator
Thirst Mutilator's picture

Take that you pesky grandkids!

Wed, 02/25/2015 - 14:18 | 5827790 davidalan1
davidalan1's picture

my shorts were shit stained anyway.

Wed, 02/25/2015 - 14:20 | 5827806 i_call_you_my_base
i_call_you_my_base's picture

Shorting treasuries means that you believe the fed, which means you are an idiot.

Wed, 02/25/2015 - 14:30 | 5827857 Againstthelie
Againstthelie's picture

Being early is being wrong, too.

Wed, 02/25/2015 - 14:24 | 5827828 Comte d'herblay
Comte d'herblay's picture

Aside from the headline, I need to go back to Investment/Gambling school to understand this. 

Why is Bond jargon, so much more complicated than stock?

Wed, 02/25/2015 - 14:28 | 5827849 NoVa
NoVa's picture

If I told you, then I'd have to kill you - 

/s/

Wed, 02/25/2015 - 14:32 | 5827871 NoVa
NoVa's picture

Tens are 100-3+ (1.99%) just about where we closed last night.  Market continues building a base.   

Auctions form the cost basis out of which they trade.  next move will be lower yields on the long end over next week or two, IMHO

 

NoVa


Wed, 02/25/2015 - 14:28 | 5827850 Soul Glow
Soul Glow's picture

Negative real interest rates run the economy ahaha!

Wed, 02/25/2015 - 14:30 | 5827859 gcjohns1971
gcjohns1971's picture

The latest Euro crisis is a powerful support for the Treasury.

Funny how those come along just as discussions of really ending QE, and/or of raising rates come along, isn't it?

Wed, 02/25/2015 - 14:34 | 5827882 Gringo Viejo
Gringo Viejo's picture

So, who's buying? And with whose money?

Wed, 02/25/2015 - 14:38 | 5827905 Soul Glow
Soul Glow's picture

The indirect soaked up what the PDs and direct didn't.  Is it CHina still needing to play the paper game?  Or Brussles?  Or CHina through Brussels?  Or Russia through London!  WHo fucking knows but basically everyone is so desperate not to let the shit implode they have gone into overdrive.  

Every single nation-state is now printing currency to buy bonds.  Real rates are negative and inflation in food is high.  Basically this is the boot on the middle class and it won't end until the middle classes of the world give up.  This is why Greece is so important.  The middle class just voted to oust the fiat money debt system.  Too bad we found out economic hitmen are still around.

Wed, 02/25/2015 - 14:42 | 5827921 disabledvet
disabledvet's picture

"Anonymous" is buying....

Wed, 02/25/2015 - 14:49 | 5827956 LawsofPhysics
LawsofPhysics's picture

"Too bad we found out economic hitmen are still around." -- yes, but I know a few, in good shape, no worries, I am sure their flesh will taste good.

Wed, 02/25/2015 - 14:36 | 5827892 The Bell Rang
The Bell Rang's picture

They say no one rings the bell at a top. Yet i think i hear something starting to chime.

Wed, 02/25/2015 - 14:39 | 5827908 Bastiat
Bastiat's picture

Tinnitus.

Wed, 02/25/2015 - 14:47 | 5827946 The Bell Rang
The Bell Rang's picture

lol........probably

 

Wed, 02/25/2015 - 14:40 | 5827913 assistedliving
assistedliving's picture

one day the shorts will be right.  they may be dead but they will be right

 

so?

Wed, 02/25/2015 - 14:46 | 5827942 LawsofPhysics
LawsofPhysics's picture

yes, yes, John Corzine might want to comment on this...

Wed, 02/25/2015 - 14:40 | 5827917 Bastiat
Bastiat's picture

Equity shorts burned again:  in other news: a dropped apple accelerated at 9.8m/sec/sec.

Wed, 02/25/2015 - 14:46 | 5827939 disabledvet
disabledvet's picture

Volkswagen. That short squeeze caused a billionaire to jump in front of a train.

 

What are these clowns posting as collateral?

 

Philadelphia?

Wed, 02/25/2015 - 14:47 | 5827948 LawsofPhysics
LawsofPhysics's picture

Collateral?  What's that...?

 

Fuck, money creation itself has been divorced from such things for 40+ fucking years!!!

"Collateral" LOL!  Here, hold this bag for me...

Wed, 02/25/2015 - 14:42 | 5827922 Unknown Poster
Unknown Poster's picture

Three and 7yr. repo rates still positive.

Wed, 02/25/2015 - 14:49 | 5827954 disabledvet
disabledvet's picture

But I need one hundred...billion is it?...to tide my "Home Depot" over for...just a few weeks really.

 

Or is it my Sears? Or Target? Or Wal Mart? Or Lowes?

Wed, 02/25/2015 - 15:01 | 5828006 Unknown Poster
Unknown Poster's picture

2,5 and 10 yr repo are negative. Bond traders are either dumb, or are playing to some poorly thought out scheme/rules.

Wed, 02/25/2015 - 14:44 | 5827929 LawsofPhysics
LawsofPhysics's picture

Whe knew that there were so many masochists out there?  Personally, I can come up with a very low negative number.  That is where rates are headed...

Wed, 02/25/2015 - 14:50 | 5827960 Bastiat
Bastiat's picture

Right:  with negative retes, the Fed, through the banks, will pay the funds to lever up and buy stocks. 

No stock market crash = no depression; everybody knows that!  Digital breadlines are so abstract.

Wed, 02/25/2015 - 14:55 | 5827970 LawsofPhysics
LawsofPhysics's picture

Yes, yes, as it turns out, the soviets really were ahead of their time...

Wed, 02/25/2015 - 15:30 | 5828126 sudzee
sudzee's picture

German 5yr at -0.08.

Do NOT follow this link or you will be banned from the site!