This page has been archived and commenting is disabled.

Demand Surges Into 10 Year Treasury Auction As Shorts Squeezed Again

Tyler Durden's picture




 

The short squeeze into 10Y auctions never fails.

As we noted first thing this morning, the 10Y was trading special in repo, which as we have shown repeatedly is usually the best indicator of a very strong auction (and profits for Element Capital, whose trading strategy is said to rely precisely on a repo squeeze into 1PM).

This is how the repo market looked this morning:

And sure enough, moments ago the Treasury confirmed just that when it reported blistering demand for the 10Y led to a 2.235% high yield, stopping through the When Issued 2.246% by a whopping 1.1 bps - your classical squeeze into the auction.

Not only that but the Bid to Cover of 2.70% was very impressive and made last month's disappointing 2.40% outlier a thing of the past.

The internals were also strong with Directs taking down 13.8%, up from 5.8% and above the TTM average, Indirects taking 57.5% also above the 54.9% 12 month average, leaving just 28.7% to the Dealers: the lowest since May.

In conclusion: rumors of the death of US Treasury paper have been greatly exaggerated, for now.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 09/09/2015 - 13:14 | 6527238 Soul Glow
Soul Glow's picture

<-- No rate hike this month

<-- Rate hike this month

Wed, 09/09/2015 - 13:19 | 6527275 venturen
venturen's picture

<--- No Rate Hike EVER

Wed, 09/09/2015 - 14:50 | 6527771 Exile on Mainstreet
Exile on Mainstreet's picture

Soull glow. Dude seriously, how are u the first to post on 75% of all newly posted stories?

Wed, 09/09/2015 - 13:23 | 6527295 KnuckleDragger-X
KnuckleDragger-X's picture

BOHICA for everybody......

Wed, 09/09/2015 - 13:42 | 6527418 4 wheel drift
4 wheel drift's picture

need 1.5 % (10 year)

 

 

:^)

Wed, 09/09/2015 - 14:43 | 6527736 annrkee
annrkee's picture

They will continue to kick this can down the road as usual...

Wed, 09/09/2015 - 15:40 | 6528056 madbraz
madbraz's picture

BS rumours of the death of the treasury market are spread by none other than zerohedge - the gartman of government bond analysis.

 

 

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