This page has been archived and commenting is disabled.

Unexpected Surge In Auction Demand For 7 Year Treasury

Tyler Durden's picture




 

The 2 Year auction was strong, the 5 Year auction yesterday was mixed, but one word can best describe demand for today's issuance for "curve belly" 7 Year paper: blistering.

Moments ago, the 7 Year When Issued was trading at 2.028, expecting some serious concessions into the auction. Not only did these not materialize but the auction came in far better than expected, pricing in at 2.013%, a whopping 1.5 bps through the When Issued. The Bid to Cover was a strong 2.511, well above the 2.46 TTM average, with 56% of the auction going to indirects - above the 12 month average of 54.6%, 13.5% to Directs, which was also above average, leaving 30.5% for the Dealers.

Overall, the strong auction provided a lift for the longer end of the curve, which as a result of today's auction is set to flatten the 2s30s even more, thus making an even bigger mockery of the "Net Interest Margins are rising" thesis.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 11/25/2015 - 12:49 | 6838488 Itsthetiming
Itsthetiming's picture

The USD is one of the safest bets. There's always taking your money to Europe where they will charge you to hold it.

If the US can somehow avoid zero or negative interest here, demand will remain robust.

Wed, 11/25/2015 - 12:54 | 6838537 kralizec
kralizec's picture

Heh, hilarious.

This was meant in jest...right?

Wed, 11/25/2015 - 12:51 | 6838504 KnuckleDragger-X
KnuckleDragger-X's picture

How many are being resold as a 'safe' investment for fleeing third worlders?

Wed, 11/25/2015 - 12:55 | 6838551 Seasmoke
Seasmoke's picture

I'm trying to understand how in the race to the bottom , the USD going in the higher direction, is sold as a great thing US citizens.

Wed, 11/25/2015 - 18:48 | 6840262 BillGrossJr.
BillGrossJr.'s picture

Cheaper happy meals, gasoline, toys, shoes, socks, anything else from China that will speed up Ameica's coming diabetic heart attack

Wed, 11/25/2015 - 13:11 | 6838689 JamaicaJim
JamaicaJim's picture

Brussels on line 1....they need more thought up dough.....hit some fucking keystrokes, or they'll send over Van Damme to kick the fuck out of ya.

Wed, 11/25/2015 - 18:42 | 6840252 BillGrossJr.
BillGrossJr.'s picture

and Luxembourg, Ireland, Cayman Islands and Switzerland. Keep buying US paper or Paris will happen to YOU

Wed, 11/25/2015 - 13:37 | 6838860 Consuelo
Consuelo's picture

"...with 56% of the auction going to indirects"

 

You're welcome.

Sincerely,

The BLICS

 

 

 

 


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