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Ugly 30 Year Auction Tails Big As Direct Bid Tumbles To Lowest Since March 2013

Tyler Durden's picture




 

Yesterday's 10 Year auction was impressive, but one can't say the same about the just concluded, and final for the week, 30 Year reopening auction of Cusip RK6 which saw a whopping tail 3 bps to the 2.567% When Issued, when the the High Yield priced at 2.597% (still, about 8 bps tighter than the March 30 auction). The main driver of this subpar demand was not the Bid to Cover ratio, which while very low in historical terms was unchanged from last month at 2.18%, but the collapse in the Direct bid, which took down just 7%, the first single digits Direct take down since May of 2014, and the lowest overall since the 4.9% in March of 2013. However, the Direct slack was more than eagerly sopped up by foreign central banks which took down a near record 51.3%, just shy of the all time high of 53.2%. Dealers were left with 41.8%.

Some more statistics from Stone McCarthy:

The 30-year bond auctions have stopped through their respective bidding deadlines by an average of 0.2 basis points over the past year, but there have been significant tails at the most recent three auctions, and the second reopening auctions over the past year have also stopped with an average tail of 0.4 basis points. The average bid/cover for 30-year bond auctions over the past year was 2.43, and the average for the four second reopening auctions was little different at 2.41. The bid/covers have been significantly smaller, however, at the bond auctions so far this year.

The result: a big hit on the long end of the bond curve which saw the 30Y trade promptly lower to 2.60% and likely wider as the surprise weakness in today's auction is digested by the secondary market.

 

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Thu, 04/09/2015 - 13:20 | 5975648 Soul Glow
Soul Glow's picture

In a world of fiat gold is king.

Thu, 04/09/2015 - 13:27 | 5975672 LawsofPhysics
LawsofPhysics's picture

Sure then again...  ...in a world with 7+ billion all competing for a higher standard of living, consumable calories are necessary.   I will certainly exchange some of my farm fresh food for your gold.

Thu, 04/09/2015 - 13:29 | 5975682 TeamDepends
TeamDepends's picture

Better yet, have both!

Thu, 04/09/2015 - 13:34 | 5975695 LawsofPhysics
LawsofPhysics's picture

Yes, my hypothesis is that the Fed is going to hold all that debt to term.  There are no longer buyers of government debt other than central banks and some pension funds (that have a gun pointed at their head).

Thu, 04/09/2015 - 13:28 | 5975676 TeamDepends
TeamDepends's picture

What kind of uber-chump would buy 30 year US paper?

Thu, 04/09/2015 - 14:05 | 5975790 vote_libertaria...
vote_libertarian_party's picture

Somebody who isn't investing their own money.

Thu, 04/09/2015 - 13:29 | 5975686 Jano
Jano's picture

since 7-th april down 2,05% at this moment. usd is up.....

 

www.golprice.org

Thu, 04/09/2015 - 23:12 | 5977462 blowing winter
blowing winter's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

Thu, 04/09/2015 - 13:28 | 5975678 Quinvarius
Quinvarius's picture

30 year chart is starting to look a lot like the wrong side of a double top.  Even a banker can see that.

http://finviz.com/futures_charts.ashx?t=ZB&p=d1

Thu, 04/09/2015 - 13:29 | 5975685 KnuckleDragger-X
KnuckleDragger-X's picture

Tsk, don't they know that those are backed by the full faith and credit of our awesome goverment????

Thu, 04/09/2015 - 17:10 | 5976473 Stormtrooper
Stormtrooper's picture

That would be the full faith and credit of the remaining US taxpayers.  The government has money and has to resort to pickpocketing.

Thu, 04/09/2015 - 13:48 | 5975733 youngman
youngman's picture

you are going to get your money back..the question is will it be worth anything...and can you ever sell it before the due date if we have a crash as expected...

Thu, 04/09/2015 - 13:55 | 5975757 SheepDog-One
SheepDog-One's picture

Fed wants bonds down, Fed gets bonds down. Voila.

Thu, 04/09/2015 - 13:58 | 5975767 LawsofPhysics
LawsofPhysics's picture

Sure, sure, but don't let interests rates get too high...

there is no motherfucking spoon already.

Thu, 04/09/2015 - 14:08 | 5975798 Glass Seagull
Glass Seagull's picture

 

 

low duration bond basis owners chuckling to themselves

Thu, 04/09/2015 - 14:17 | 5975838 diana_in_spain
diana_in_spain's picture

According to the astrolger mahendra sharma who has a great track record, shorting the long bonds will make many people millionaires in the yaer to come.  buy TMV or calls on TMV

Thu, 04/09/2015 - 15:18 | 5976110 diana_in_spain
diana_in_spain's picture

I wouldnt scoff, who ever down voted me , look at his track record http://www.mahendraprophecy.com/

 

Thu, 04/09/2015 - 14:19 | 5975852 diana_in_spain
diana_in_spain's picture

my theory is the dollar will start losing ground to the BRICS so they (US) will raise rates to prevent the dollar from dropping.

Thu, 04/09/2015 - 15:06 | 5976060 LawsofPhysics
LawsofPhysics's picture

perfect cover.  They can re-invest the funds from the debt maturing as well.  Ownership has it's privileges.  The Fed and their proxie have cornered the bond "market" in the west.

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