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Strong 3 Year Auction Surprises Bond Watchers As Shorts Rush To Cover
With the Fed's first rate hike in nearly a decade set to take place next Wednesday, and a move up from the lower bound precisely 7 years after the Fed cut rates to zero for the first time, there was some trepidation that today's 3 Year auction could turn nasty. That did not happen, and instead the Treasury managed to sell $24 billion in 3 year paper on quite reasonable terms, with the high yield printing at 1.255%, stopping through the When Issued by 0.9 bps.
The internals were also solid, with the Bid to Cover rising from last month's 2.824 to a respectable 3.14, while the Primary Dealer take down of just 34% was the lowest since May of 2010. The other demand came from Indirects who accounted for 47.4% of the final placement, fractionally below the TTM average of 48.4%, while Direct demand surged from 15.1% to 18.6%, well above the TTM average of 10.7% and the highest since September of 2014.
Then again considering the plethora of specials on the curve, which included both the 2Y, 3Y and the 10Y, it is hardly surprising that many took opportunity to cover the structural short headed into today's auction by purchasing paper in the primary market.
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High Yield still having a bad day.
yep. blackrock those bastards can suck it.
DUDE!!! -Your junk is on fire!
Hold still while I kick you in the nuts repeatedly...
Paper everything is starting to burn.
Statistical blip.
After the Yellin and no rate change comes the Swearin'.
Cue Obama with a fiddle in D.C.
In a toga.
1.255% is a ripoff for uncle sam. merkel gets nirple.
Shorts.., lol, when are they going to come to grips with the fact that we are Japan?
The BLICS
<> Belgium, Luxembourg, Ireland, Cayman, Swiss?
Or:
<> Balsam Lake Ice Cream Shoppe?
"BELGIUM, LUXEMBOURG, IRELAND, CAYMAN, SWISS
The hidden evidence is coming to the fore. The challenge is to identify which entities are buying USGovt debt in the form of USTreasury Bonds. The USFed is no longer permitted to purchase additional USGovt debt issuances due to its ownership limits, unless it changes the portfolio rules. Or else, the USFed chooses not to add to its $4.5 trillion toxic balance sheet, since wrecked beyond repair. In recent months, six nations have been carrying the load of maintaining USTreasury yields at ZIRP. Those nations are Japan and the BLICS: Belgium, Luxembourg, Ireland, Cayman Islands, and Switzerland."
"From June 2011 to January 2015, the USFed has bought $825bn in USTreasurys, while the BLICS have quietly bought $818bn in USTreasurys during the same timespan. These are small nations without huge trade surpluses. The source of data is the Treasury International Capital (TIC) Report provided by the Federal Reserve itself. The only remaining offices for purchasing USTreasury debt securities comes down to just Japan and BLICS nations. The USGovt and USFed have conspired as a Ponzi Scheme, using digital counterfeit to purchase perhaps all net new USTreasury debt since July 2011. QE has been exported in a den of thieves and a nest of lies."
Don't you miss Marc to Market's great weekend insight and knowledge into all of this?
s/
Jim Willie is right, and if the BLICS don't comply with this scheme, Langley will fucking murder them all
There is a BIG global economic slump in progress, US Treasuries are going to get a continuous bid as flight to safety progresses. My treasury portfolio has HUGE capital gains, and I expect the 30-year to go back down to about 2.3% in 2016.
KA-CHING !!!!!!!!!!
What a disappointment, I thought the title was 3 way action.