Five Year Bond Auction Comes Weak Despite Fresh Record Low Yield

Tyler Durden's picture

In sharp contrast to the "WTF" 10 Year auction from 2 weeks ago, which smashed virtually every record, and saw a record 45.4% direct take down, today's $35 billion in 5 Years was a pale comparison. Yes, the bond priced at a new all time low yield of 0.584% which tailed the When Issued of 0.578% at 1 pm, but that's as good as it got. The Bid To Cover was 2.71, far below the TTM average of 2.90; the Directs were just 5.2%, or the lowest since the 2.9% in November 2009, resulting in Primary Dealers once again forced to buy up more than half of the auction or 52.2%, leaving just 42.6% for the Indirects. In many ways the auction was a replica of yesterday's unimpressive 2 year auction. Tomorrow we have a 7 year which concludes this week's latest bout of bond issuance, and will show just what the appetite for the curve belly is. What is strange is that the EURUSD algobot took the flashing red headline of the results, and without even pretending to think about it, sent the pair 20 pips higher on what was effectively a weak bond auction, in the process pushing stocks well higher as well. We bring this up just to show what a joke a broken, centrally-planned market is.

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HD's picture

Chart gave me a seizure...

SWCroaker's picture
Definition of GARISH  (from
1: clothed in vivid colors 2 a : excessively or disturbingly vivid <garish colors> <garish imagery> b : offensively or distressingly bright : glaring 3: tastelessly showy : flashy
I'm witch u bro...
NotApplicable's picture

Well, the "High Yield" metric is quite the misnomer.

youngman's picture

After a couple of years of everyone running to the safety of US you think they might feel a little wierd that maybe they are not running to safety.....but running into a rat trap.....

TheCanadianAustrian's picture

It's like people trying to escape from their problems by clamoring to see the new Batman movie.

Bam_Man's picture

Everyone isn't climbing over each other to be the first to lend the government money at 0.57% for five years? Imagine that.

Anyone with even a shred of remaining sanity can see that there is going to eventually be an enormous amount of wealth destruction in US Treasuries. When the rush to "get out" begins, it is going to be spectacular.

Silversem's picture

The only real safety is in hard assets like gold and other commodities. So buy it, invest in it, trade it........make shure you have it before it is too late!

mademesmile's picture

Who is buying US treasurys?  Why not hold on to your cash for such a miniscule return on interest? It makes NO sense to me.

If it goes to a real negative rate, why not just sit on the cash? Who will trade $10k for a guaranteed $9.98K 10 years down the road.  What is REALLY being bought? I just don't get it. Can someone explain this irrational behavior?

Snakeeyes's picture

Surprised that anyone is interested at these yields.

But they have been declining at almost a linear rate since Sept '81.


God Bless The Virtuous's picture

This is it kids!

I have been saying for years now, its all about MATH!

I do not in anyway endorse Barrons,(barely worth the price), but this week we had a great article by Stephine Pomboy!

Must read and THINK about the issues raised!

The coming depression,

we are in the early stages,(Bernanke in particular),but Geithner as well will be the main drivers and the communist policies of the most cowardly administration since Woodrow Wilson and the birth of the PROGRESSIVE Reveloution!

The first domino's,

California city bankruptcies, are well on their way! The ENTIRE state is bankrupt, morally also!

The unions are going to get their rank and file 100% of nothing if the members don't put a stop to this socialistic administrations tactics!

A lie,

repeated over and over enough times, becomes the truth!


Into what,

the oblivion Mr. President?

This is all anti colonialist ,communist Frank Marshal Davis teachings come home to root!

Right at the heart of the republic!

The President for God's sake!


We are not going to cure this,(if there is still time?) and will NEVER be able to turn things around in a SECOND term of Obama the King!



"A republic if you can keep it"    This is what I believe Ben Franklin responded after being asked what all their work wrought...

"A free people having tasted freedom and lost it, never have tasted it again" This one I paraphrase Ronald Reagan!

But the importance is epic.

Let us not fail this challenge because we chose to sit down!

There will never be a second chance!

God    Bless     The     Virtuous