While the Fed is posturing daily whether it will or it won't monetize an ever greater portion of gross US issuance (and considering the drop in US funding needs [3], unless the Fed tapers it will soon very soon buy more than 100% of all 10 Year equivalent issuance going forward), foreigners have made their position vis-a-vis US paper loud and clear.
What is their position? The following chart from today's TBAC presentation [4]to the Treasury makes it very clear. With an ever declining, and recently the smallest on file, notional amount of Treasurys at auction going to foreigners since 2009 (and certainly much further back), they are not sticking around to see what happens.
Oops:
And as a bonus, what we pointed out first in January - the collapsing Bid To Cover across the curve - is just getting more and more obvious.
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