Just like in yesterday's weakish 10 Year auction, the thunder from Tuesday's strong 3 Year has all but gone. In today's issuance of $13 billion in 30 year reopening [4], the results were anything but strong, with the bond pricing at 2.985%, a a 3 bps tail compared to the 2.955% When Issued. Furthermore, the BTC was a big drop compared to last auction's record 2.98, coming at 2.60, compared to 2.68 in the last 12 auctions. And with Indirects taking down just 31.9%, and Directs sliding to a one year low of 7.2%, it means that it was the Fed, via the Primary Dealer repo mechanism that once again took down a whopping 60.9% of the entire auction. Needless to say, the bond market response was not pleasant, but was to be expected as the Fed continues to artificially massage the curve in any and every way possible. Most hilarious, however, was the tweet sent out by Bill Gross in the minutes after the auction which we present below: it speaks for itself.
[5]
And historical results:
[6]