Strong 30-Year Auction Sets The Stage For Yellen's Final Rate Hike

After yesterday's stellar 3Y morning auction, and disappointing 10Y afternoon auction, today's reopening of the 29-Year, 11-month RZ3 Cusip was right down the middle.

The bond stopped at a high yield of 2.804%, stopping through the When Issued 2.808% by 0.4bps, the third consecutive stop through in a row. The high yield was above November's 2.801% but below October's 2.870%.

The internals were solid but not unprecedented: the Bid to Cover rebounded from last month's 2.225 to 2.479, and above the 6 month average of 2.318. This was the second highest BTC going back to July 2016 with only October's 2.53% higher.

The Indirect Award was 61.9%, unchanged from last month, and fractionally below the 6 month average 62.6%, while Directs took down 9.0%, above the 6MMA of 7.1%, and Dealers were left with 29.1%, below last month's 31.8% and below the 6 auction average of 30.3%.

Overall, a solid - if not spectacular - auction heading into tomorrow's FOMC meeting where Janet Yellen is expected to make her last 25 bps rate hike announcement. That said, the fact that today's auction wasn't a disaster, and foreign interest was solid, confirms that the curve will continue to flatten as the Fed rises the short-end every few months, ultimately inverting the yield curve some time in mid-2018.

Comments

coast1 Tue, 12/12/2017 - 13:31 Permalink

I am not bragging, and if someone tells me I am smart I say "no, I am old"..I will hold my own on a debate with anyone here, I study much in the reality realms of this universe in every manner from meditation to reading, to history et..True history.  Anyway, I say all of this to say one thing...Even with all my knowledge, my trust at this time is still in the dollar...Isnt that screwed up?  Its true tho, i will diversify, but keep dollars mostly.  But one day, and I think its coming very soon, even my ignorant faith in the dollar will go away.. Dont get mad at me, but its dollars that i use to buy food and pay for a roof over my head etc.  We are so close to having no faith in dollar tho...sorry you guys, I will work on my ignorant state of mind.

coast1 Seasmoke Tue, 12/12/2017 - 13:43 Permalink

a little...I went more for silver..40% of my holdings...plus I have food water and ammo and property...I dont want to sell my property, its somewhat country property with a year round creek (clean water)...I want to also say, tv was on and I hate tv, but watching these rich kinda bitches living in a fantasy world on tv and I hope every morning that the economy crashes just to shut these bitches up, and their cuck husbands too...sorry, I need Jesus I think :-)

In reply to by Seasmoke

coast1 Snaffew Tue, 12/12/2017 - 13:49 Permalink

I know....and finding true history is like finding a needle in a haystack. But over time, and much work, we might get come kind of clue. I do use the bible as a history lesson, its full of many intereting things..not just our money, nbut our learning must be diversified. Its like putting together the pieces of a puzzle. Why would people get on a wooden ship to sail across the atlantic..very dangerous..Because they wanted freedom from the tyranny of england..Andrew Jackson?  my hero...Give me liberty or give me death?  priceless..It is interesting that people got on a wooden ship to escape tyranny, and the snowflakes want tyranny...just rambling today, thanks for putting up with me.

In reply to by Snaffew

rbianco3 Tue, 12/12/2017 - 13:51 Permalink

I get confused on relationship between interest rates and gold but rising interest rates are usually associated with inflation and the latter should precipitate the need for more dollars to acquire gold. But not happening yet.Considering Russia has the market on Palladium I'm thinking it's a good metal to acquire.

coast1 rbianco3 Tue, 12/12/2017 - 13:54 Permalink

Let me help your confusion, this is easy...There is no association anymore...they manipulate the price of gold and silver..It goes deep as far as letting china have cheap gold so they dont sell u.s. treasuries maybe....dont try and make sense about anything, just go with your heart and hope your heart is true.

In reply to by rbianco3