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Blistering 10 Year Auction Driven By Second Highest Foreign Central Bank Takedown On Record

Tyler Durden's picture




 

If yesterday's 3Y auction was solid across the board, then today's sale of $21 billion in 10Y was an all around show-stopper.

With the high yield printing at 2.066%, the lowest since February, and down materially from September's 2.235% when pre-rate hike jitters eliminated some of the demand. There were no demand issues this time, when despite a slight drop in the Bid to Cover, foreign central banks, i.e., Indirect bidders, took down a massive 62.2% or $13.1 billion of the final allotment, which was not only far above the TTM average of 55.3%, it was the second highest on record, surpassed only by the 71.3% takedown in February 2011. This left 27.5% to the dealers - the least since May - while Directs ended up with 10.3% of the final amount.

Once again, the strength in primary issuance continues with notable disregard for what happens in the second market as foreign central banks take advantage to roll out of Off the Run CUSIPs and purchase as much OTRs as they can with every subsequent auction.

That said, if going by the surge in demand fo benchmark paper, nobody has any concerns about CPI-measured inflation any time soon.

 

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Wed, 10/07/2015 - 13:15 | 6640317 KnuckleDragger-X
KnuckleDragger-X's picture

Shiny forever, and remember "Lord of the Flies" is only a book.....

Wed, 10/07/2015 - 13:22 | 6640344 Kaervek
Kaervek's picture

If everyone forever believes the lies, they could become reality. Is this farce really ever going to end? Food for thought.

Wed, 10/07/2015 - 13:23 | 6640350 vq1
vq1's picture

unfortunetly ive been thinking the same thing. I guess this is reality.

Wed, 10/07/2015 - 15:25 | 6641060 Nenad
Nenad's picture

Obama will not finish his second term! Current Events Linked to Ancient Biblical Prophecy!

http://motivationdose.com/is-america-babylon/

Wed, 10/07/2015 - 14:38 | 6640769 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, but 1984 is finally arriving.....

Wed, 10/07/2015 - 14:28 | 6640735 aeslong
aeslong's picture

foreign bodies take records of treasury; foreign bodies dumps records of treasury. which way is it?

Wed, 10/07/2015 - 13:23 | 6640349 arbwhore
arbwhore's picture

The bond markets are saying short rates will average 2% over the next 10 years... and that is seen as a bargain.

Wed, 10/07/2015 - 13:36 | 6640422 lasvegaspersona
lasvegaspersona's picture

Everyone is cooperating to keep things afloat...for now.

The big picture is different. China is a net seller of treasuries, so is Saudia Arabia. No big entity wants to be stuck with a dying dollar.

I suspect this is just a defensive action perhaps in preparation for something 'definitive'...or maybe I'm delusional...the guys in the white coats who bring me my meds won't tell me which it is...they are out to get me.

Wed, 10/07/2015 - 13:44 | 6640471 Baby Bladeface
Baby Bladeface's picture

Defaulted Ukro bond auction yesterday the guys in white coats told of?

http://dc.isda.org/cds/republic-of-ukraine-6/

Wed, 10/07/2015 - 13:45 | 6640472 Grandad Grumps
Grandad Grumps's picture

Both China and the Saud have their own problems caused by a squeeze on their internal financials. China has a slowing economy (or did until September) and the Saud have lower oil prices.

Once countries become enslaved to debt-money they cannot escape without turmoil. China and the Saud are no less enslaved to debt-money than Greece or the United States.

One would think after a while that the people of this world would understand where the debt-money problem is coming from, open that blind eye and do something about it. But alas, there is not enough concentrated power to set the world free.

Wed, 10/07/2015 - 13:32 | 6640402 LawsofPhysics
LawsofPhysics's picture

mission accomplished...   ...suckers...

Wed, 10/07/2015 - 13:37 | 6640432 Consuelo
Consuelo's picture

"...foreign central banks, i.e., Indirect bidders"

 

The 'BLICS'...?

 


Wed, 10/07/2015 - 13:39 | 6640441 the grateful un...
the grateful unemployed's picture

or they're really bullish on the dollar. if you dont like the yield you simply lay it off on FRNs (floating rate notes) on matters of pertinence did they sell this paper at a discount to par? did uncle fed pay these foreign central banks (up front) to hold our paper?

Wed, 10/07/2015 - 13:47 | 6640442 Grandad Grumps
Grandad Grumps's picture

Why does this matter?

There is collusion between the central banks so that every country with a BIS tied central bank will be funded by other country central banks. More debt-money is always created. This is how Japan got to be where it is. There can never be a shortage of debt-money as long as there is no limit to the number of zeros available.

Countries that do not have a BIS associated central bank are on their own. They have more independence, but they lack debt-money creation. They are also in the cross-hairs for globalist banker conquest.

Wed, 10/07/2015 - 14:40 | 6640782 Bay of Pigs
Bay of Pigs's picture

The William Dudley is a busy guy these days between the NYFED and BIS trading all the shitty CB paper for other shitty CB paper.

Wed, 10/07/2015 - 14:34 | 6640759 Bam_Man
Bam_Man's picture

It's called "Front-running QE4 and NIRP", bitchezz.

That 2.06% coupon will be looking mighty good a few months from now.

Wed, 10/07/2015 - 14:40 | 6640781 Soul Glow
Soul Glow's picture

TARP I, TARP II, QE, QE2, QE LIGHT, QE TWIST, QE3....

So which easing phase are we on?

Wed, 10/07/2015 - 14:39 | 6640775 Soul Glow
Soul Glow's picture

The Ponzi continues....

Wed, 10/07/2015 - 15:32 | 6641110 Gracy101
Gracy101's picture

This calls for more beer!

https://thatguybloke.wordpress.com

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