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Foreign Central Banks Rush To Buy In 30 Year Auction; Primary Dealers Awarded Least On Record

Tyler Durden's picture




 

The just concluded 30-Year bond reopening of Cusip RP5, in which the US Treasury sold another $13 billion in long-dated paper in this year's final auction of 30 Years, was almost a carbon copy of yesterday's 10 Year auction.

While the high yield of 2.978% posted a modest decline from last month's 3.07%, it did tail the When Issued fractionally, which was a 2.975% at 1 pm, in a rerun of yesterday's auction. And just like yesterday, The Bid to Cover posted a modest increase, rising from 2.409% to 2.422%. But the biggest comparison is that Indirect Bidders also surged once again, taking down 63.9% of the final allotment, and with the exception of September's 66%, would have been a record high. And while Directs kept their share of just over 10%, the same as last month, this mean that the Dealer takedown of 25.7% was the lowest on record.

Perhaps the only different from yesterday's 10 Year, is that while the benchmark maturity was trading negative in repo yesterday and still is today, the 30Y was positive on both days, suggesting there was less of a short squeeze heading into the auction. Which can only mean that foreign central banks were once again the dominant marginal price setters, which naturally is to be expected in a world in which trillions in government debt yield negative nominal rates, and where whispers that a Fed rate hike could lead to policy error and massive curve inversion, mean that buying the long end could be just the right trade ahead of the Fed being forced to unwind its tightening efforts and proceed to go NIRP or launch QE4.

 

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Thu, 12/10/2015 - 14:18 | 6905399 Soul Glow
Soul Glow's picture

So you're saying the world is still printing paper to buy paper, promising to pay back said paper with said paper.

Got it.

Thu, 12/10/2015 - 14:37 | 6905563 Kaiser Sousa
Kaiser Sousa's picture

Soul Glow -

EXACTLY!

Thu, 12/10/2015 - 14:21 | 6905425 Consuelo
Consuelo's picture

Belgium, Luxembourg, Irleand, Cayman, Swiss.

 

Wonder if that could be put to a jingle...?

Thu, 12/10/2015 - 14:31 | 6905514 matinee55
matinee55's picture

corrupt bank cartels buying each others junk to keep the POS ponzi scheme alive until their ready to pull the plug (looked after their interests)

Thu, 12/10/2015 - 14:39 | 6905581 Kaiser Sousa
Kaiser Sousa's picture

yeah buying worthless 30 year bonds from the brke ass US Govt...

wonder what moronic mother fuckers would be doin that shit????

Thu, 12/10/2015 - 14:45 | 6905619 madcows
madcows's picture

sure, charge your citizens -0.3% to hold their money, and invest it at 0.25% in america.  That's a free .55% FOR NOTHING!!!  That's like a thousand percent more than my bank is giving me.  They don't have to do anything... just pay off the debt at 0.55% a year.  Shazzam!

Thu, 12/10/2015 - 15:23 | 6905904 Demdere
Demdere's picture

Relate this post to the McCleod link above.

https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...

The answer is 'of course it will crash, and in a cascade of failure, because it was not designed as a fail-safe system, nor tested under these conditions'.

Remember that Google still crashes once in a while.  Google is the best software at that scale, ever, and was designed and tested as a fail-safe system.

https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...

9/11 was a False Flag operation by the Israeli-Neocons in the US Government

Thu, 12/10/2015 - 15:33 | 6905975 InnVestuhrr
InnVestuhrr's picture

I have been posting this on ZH for quite some time:

The 30yr Treasury is going to surge in 2016 with yield back down to about 2.3%, and I am going to earn another huge capital gain - in addition to the interest.

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