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Solid 3 Year Auction Prices At Lowest Yield Since April
The recent scare that investors may be slowly (or not so slowly) waning in the primary market for US Treasurys is rapidly becoming a distant memory, and after yesterday's 3 Month bills pricing at 0.000% for the first time ever, today's strong 3 Year auction should end any debate, if only for the time being, about interest in US paper.
Pricing at a high yield 0.895%, today's 3 Year bond price 0.6 bps through the 0.901% When Issued (one hopes auctions are no longer being rigged by the Primary Dealers). This was the lowest yield on the 3 Year paper since April's 0.865%, and a substantial drop from the 1.056% last month. The Bid to Cover of 3.138 was slightly weaker than last month's 3.233 and below the TTM average of 3.291.
Indirects ended up holding 47.7% of the auction, precisely on top of the 1 year moving average, if slightly below September's 51.0% and on par with the lowest allocation to foreign central banks since January. Dealers held 41.1%, the same as last month. This meant Directs ended up with 11.1% of the final allocation, the highest since July.
Altogether a solid auction for those wishing to telegraph that the Fed's rate hike plans are very unlikely to be ever validated. In fact, if anything, the recent trades in the bond market suggest that just like stocks, bonds are now eagerly looking forward to Yellen unleashing QE4.
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What else are the institutions going to buy as the fiat ponzi spins down the toilet?
Ghost shirts. They're bulletproof dont-cha-know.
There always be interest in US Treasury paper from the US/FED itself via it's proxies. For the people who still don't get it, that is what QE is all about.
Y'all just wait until there are collateral calls. Ain't enough paper around to meet the demand gonna be there.
And no, it will completely overwhelm the "official" Chinese sales, which will pale in comparison to the private Chinese collateral calls alone. (Remember all them bazillions of dollars of rehypothicated non-existent commodity collateral? Gonna be some postings, Luci!)
Gonna be a hot bid in the olde bond market tonight (well at some point if the normal ZH'er's view of the world comes to pass.)
Green shoots my ass
Biden/Warren, our next fearless leaders
Oh fucking boy
Or Trump and his laundry list of Chapter 11s.
Seems to me there's a lot of road in the Fed's printer yet.
gotta buy em while you can at par cause breaking even is better than the negative yields which are right around the corner.
The Chinese are dumping, everyone is happy! until these papers worth less than paper!
looking forward to 30 year @ 0.000%...
Yellen...I'm turning Japanese, I think I'm turning Japanese, I really think so
Turning Japanese, I think I'm turning Japanese, I really think so
I'm turning Japanese, I think I'm turning Japanese, I really think so
Turning Japanese, I think I'm turning Japanese, I really think so
I've got your picture, I've got your picture
I'd like a million of them all round my cell
How can Treasuries not have a solid auction when the pricing and sales of Treasuries is always a matter of conspiratorial policy.
Step 1: I-Bank or foreign central Banks Buy treasuries
Step 2: Create money out of thin air to cover the cost of the treasuries
Step 3: Profit
Chuck Shumer to Yellen: Get to work buying our debt.
Round-Robin debt buying thanks to the central banksters (Fed, BOJ and ECB).
In general, what is the normal type of collateral accepted by the FED in these treasury auctions?
Looks like Armageddon has been postponed yet again. I'm getting tired of this.