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Shorts Mauled In Another Strong 10 Year Auction In Which Foreign Central Banks Push Yield To Taper Tantrum Lows
As noted yesterday, the short interest heading into today's 10 Year auction was massive. So massive, in fact, that the 10Y was trading super special in repo to the tune of -2.24%...
... as an unknown number of speculators had hoped that what did not happen in March (when the 10Y auction carried a comparable short interest) will take place today. Sadly for them, they will have to wait one more month, while suffering yet another squeeze in the interim, because moments ago the 10Y priced at a yield of 1.925%, well through the 1.929% When Issued, and the lowest yield for bond auction since the bond market's "Taper Tantrum" freak out in May of 2013.
The internals were solid: Bid to Cover of 2.62, in line with last month's 2.65, and a fraction below the TTM average of 2.69. The Dealers took down 32.2%, 100 bps higher than a month ago, while Indirects (aka mostly foreign central banks) once again ended up with a near record 58.5% (last month it was 58.6%) while the Pimcos of the world and other Direct Bidders had to contend with just 9.3% of the final allottment.
And so, one more month, the bond bubble which is second only to the stock bubble, continues chugging along mostly thanks to the very same central banks who have no choice but to keep buying America's "high" yielding Treasurys (compared to Europe's NIRP and Japan's DERP), even though the same central banks would like nothing more than to reset the 10Y to trade somewhere around 4% just so they can finally proclaim mission accomplished and say the US economy is once again growing at its historic pace.
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Tasty shorts! Meanwhile AAPL is 50 cents from breaking below its 50day sma.
10 year negative? bet they're trying for a 2% 30yr mortgage!
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So many people/corporations/countries want in on the counterfeit money scam...
tick tock...
They have to buy our disaster because their disaster is worse...for a little while anyway...
bond bubble, lulz
How much longer can this inverted capital structure survive? Did an educated western governement really issue a ten year bond with a negative rate? What the fuck does that tell you? Tick tock....
"As noted yesterday, the short interest heading into today's 10 Year auction was massive. So massive, in fact, that the 10Y was trading super special in repo to the tune of -2.24%"
Do they know the Excel function PRICE can't handle negative yields?
Keep those rates as low as possible!
Chase the savers into the equities casino!
and into (covenant lite) shale (junk) debt
US must have more crude production
People still don't understand this, and they won't until they are dying of starvation. Even then most won't...
we're headed to double-digit negative rates -
i suspect they could easily rig the bid-to-cover whenever they want to fit their buddies needs. it's not like this number (or any for that matter) is scrutinized or audited...
"though the same central banks would like nothing more than to reset the 10Y to trade somewhere around 4%"
haha ... that would crush housing and bank income (refinance revenue goes poof)
10yr yield has other plans ... like heading (eventually) to 1%
1%?...optimist....
Reset the 10-year to 4% and declare Mission Accomplished? That's a good one.
NIRP, here we come.
ZH almost daily has a lance "ponder" roberts post ... he of the "10yr yield will hit 4% in 2015" and usd will weaken (about 1200 pips ago)
i guess Lance's checks still clear
Eventually only the Indians will have casinos.
Everything is awesome!
<sarc>
Winning...
Ouch! Another MAULING here!
like last time, dust myself off, treat my wounds and get ready for tomorrow