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Strong 2 Year Auction Prices At Highest Yield For 2015
As we documented previously, one of the best ways to determine if a given Treasury auction will be strong is to look at the implied short overhang heading into the auction courtesy of Repo rates. Earlier today, ahead of today's $26 billion auction, the 2Y was trading -0.27% in repo: not too shorted, but judging by the results of the just concluded auction, shorted enough.
The results: a high yield of 0.648%, pricing through the When issued 0.649% by the smallest possible increment, which was the highest yield for 2Y primary issuance in 2015 and the highest since December's 0.703%.
The Bid to Cover rose modestly from April's ugly 3.300 to 3.396, just under the TTM average of 3.42. Directs got a higher than average chunk at 17.2%, which left Indirects with 42.3% and Dealers holding 40.5%.
Overall, a strong auction, and one that has sent the bond complex yields even lower in its aftermath, suggesting that indeed there was quite a bit of wrong-way positioning headed into the auction especially following today's "strong" economic news.
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Of course the demand is strong if they can print the money they need to buy their own shit.
Gartman is an idiot !
Gartman knows how to trade!
The 10yr Treasury Futures is at 128 while the bond is above 156. He's up half point on 10yr while lost 3 points on the bond. WINNING!
http://www.cmegroup.com/trading/interest-rates/us-treasury/30-year-us-tr...
To quote the article thread from earlier today:
Long of One Unit of Ten Year Notes/short of One Unit of the Long bond future: Friday, May 22nd we wished to sell into the strength of the bond market and we did so by selling the longest end of the curve and buying that which is shorter. That is we bought September T-note futures at or near to 127 5/32nds and sold September bonds at or near to 153 1/32nd. As we write, they are trading 127 17/32nds and 154 22/32ns respectively so we are up 12/32nd on the T-Notes and we are down 43/32 on the bonds. The first loss is always the better loss and we want out… immediately upon receipt of this commentary.
since when three times oversubscribed is "ugly"? what is this, CNBC light?
have to love some of the commentary coming out of fischer (2nd speech, now in tel aviv). basically extending the cover they are going to need IF they raise in the next 2 years and break shit. he shudda just held up a sign today that said "DISCLAIMER: we reserve the right to put the rocket right back on the pad once we commence lift-off". truth is NOBODY has the balls to put their prints on this thing. give me the switch ... ill throw it.
FISCHER: FED'S GLOBAL RESPONSIBILITIES ARE 'NOT UNBOUNDED'
FISCHER SAYS FED TO WEIGH GLOBAL IMPACT WHEN RAISING RATES
FISCHER: STABILITY RESPONSIBILITIES DON'T `STOP AT OUR BORDERS'
FISCHER SAYS FED COULD SLOW RATE RISES IF WORLD GROWTH FALTERS
FISCHER SAYS FED TO WEIGH GLOBAL IMPACT WHEN RAISING RATES
If I had all the money in the world and was speculating I would still be 100% in the treasury market and LONG.
The blowback from the catastrophic "embargo" policy relative to Russia and indeed Turkey is simply showing up in the numbers now.
Defense spending is going to remain ENORMOUS now and going forward for at least a decade if not "4evr."
This will "tax" even the best of our policy makers as the size of this so called "no boots on the ground" war is by far the largest in US history.