"Exceptional", Record-Smashing 30Y Treasury Auction, Sends Yields Tumbling

Well, if China isn't buying US Treasurys, someone else certainly is.

After yesterday's stellar 10Y reopening auction, today's just concluded sale of $12 billion in 29-year, 10-month paper was an absolute record breaker in terms of foreign demand for the ultra long end.

The Auction stopped at a yield of 2.867%, stopping through the When Issued 2.888% by a whopping 2.1bps, one of the biggest stop throughs on record. The Bid to Cover, likewise, soared from 2.479 in the December auction, to a nosbleeding 2.741, the highest since December 2014. The bid/cover over the past year averaged 2.31, with a slightly larger average of 2.35 over the past six months and 2.35 for the four prior second reopening auctions.

Commenting on the result, Stone McCarthy said that the auction was "exceptional" and "stopped through the 1:00 p.m. bid side by the largest amount and with the largest bid/cover since December 2014."

But it was the internals that were absolutely tremendous, as the as Indirect bidders took down a record 71.5% of the auction today, up 10% from December's 61.9%, while Direct bidders took down 7.3% of the auction, slightly below last month's 9.0%. Predictably, Dealers were left with a record low 21.2%.


The spectacular result was enough to send the yield on the 30Y tumbling, and in kneejerk reaction to the auction results, it is now not only at the lows of the day, but well under the level from which it blew out on Wednesday morning ahead of the China slowdown "fake news."


Between yesterday's 10Y auction, and today's spectacular 30 Year, the results mean that all those predictions of a bear market in bonds are - once again - greatly exaggerated.


coast1 Thu, 01/11/2018 - 13:21 Permalink

2017 the dollar went from 102 to 91.. regarding crypto, to me it seems there are too many of them now, everyone hoping to get on board what they missed with bitcoin. Seems to me but nothing but a big mess now..lollypop coin, poprock coin etc. I am thinking about starting a "Jesus coin". And is oil up because the dollar is down? dunno. 

wmbz Thu, 01/11/2018 - 13:21 Permalink

"Well, if China isn't buying US Treasurys, someone else certainly is"

Treasuries, go well with chocolate, or so say the Belgium's.

InnVestuhrr Thu, 01/11/2018 - 13:34 Permalink

"if China isn't buying US Treasurys, someone else certainly is"

I earned way too much taxable income in 2017 trading USA treasuries, the regime's confiscation rate (ie "income taxes") was 50% - so this is my last buy-in trade for 2018, will sell all when the price inevitably goes up again.

null Thu, 01/11/2018 - 13:36 Permalink

Everyone is long USD.

Not because it does not have whatever issues that it has, but because there is not a close second.

east of eden Thu, 01/11/2018 - 13:53 Permalink

When you play with paper money, that you can print at a whim, it isn't a stretch to understand that any poor fucking central bank, anywhere, has been 'ordered' to buy the excess.

Do you really believe that you can continue to 'paper over' the chasm that has been created?

Consuelo Thu, 01/11/2018 - 13:55 Permalink



An amazing scheme they put together there - The Fed and the ESF... They must pat themselves on the back quite frequently I would imagine, marveling at their ingenious creation.    A completely sealed system of 'recycling' between agreeing parties...

To Infinity An… Thu, 01/11/2018 - 13:55 Permalink

The keystone cops routine is getting old.

Japan prints gazillions of yen and then "buys" US Treasuries.

Case solved.

It's all fun and games, and ultimately we the people end up getting it in the ass.

east of eden Thu, 01/11/2018 - 14:13 Permalink


You are going down

It is going to be painful.

So painful, that even if you survive it, generations of your grandchildren will ask 'How could you have been so fucking stupid and arrogant'.


Kefeer east of eden Thu, 01/11/2018 - 14:38 Permalink

Doubtful - the generations that failed America are the ones who did not teach their children biblical morality or truth.  Do not lie, cheat steal. covet, commit adultery, honor your parents etc...do those things and we have peace..do not teach them and where/whom they came from, then you get what you see - decadence leading toward misery.


The upcoming generations will be worse than the previous for the same reasons apart from divine revival as opposed to the judgment we now experience. 

All of us will have worked our entire lives only to loose it all to that thing we all will face, which is death.  Begs the question, what is the point apart from divine purpose for existence?...answer - there is none, therefore act like animals (because we have been told we are) and eat, drink and be merry for tomorrow you die.  Screw your neighbor and no one is really your friend.

In reply to by east of eden

Harry Lightning east of eden Thu, 01/11/2018 - 14:55 Permalink

Depending on who is doing the going down part, it might be very pleasurable indeed ! 

Would anyone dare complain save for her husband perhaps if Julia Roberts led the way in the going down department ? 

The grandchildren will ask "How could you have been so fucking stupid and arrogant", but that will be only half the question. The other half will ask "...to have supported and defended the rest of the world without making them pay for the protection?"

And so the full question will read "How could you have been so fucking stupid and arrogant to have supported and defended the rest of the world without making them pay for the protection?"

To which the only answer will have to be "Out of the goodness of our hearts and after two World Wars that proved that the rest of the world was a bunch of blithering idiots who could not get along with themselves, mandating that we had to keep the peace to prevent them from killing each other."

If the US wanted to save itself from the ignominy that you rightfully forecast, they would have to stop the hundreds of billions of dollars of aid they supply the rest of the world on an annual basis, and then close the door over a short period of time to all the imports the country presently finances the world with when the country has incredible unused manufacturing resources which could be re-constituted in the relatively short time of two to three years. 

But were the US to implement this kind of tariff to capitalize on its assets, the rest of the world would collapse economically. The Asians would have no economy if not for their sales into the US, and Europe gets a cold every time the US sneezes, so they would be in deep trouble. 

In reply to by east of eden

Kefeer Thu, 01/11/2018 - 14:30 Permalink

What is the name of that secret dark-pool slush fund??

I believe that is where the money came from, but cannot remember the name - senior moments...

Harry Lightning Thu, 01/11/2018 - 14:40 Permalink

And I will bet that Bill Gross was a major buyer at both auctions. He has a long history of talking against his book. 

hat's truly remarkable is how the Pavlov's dogs of the bond market are programmed to believe they have been handed a smashing bargain when long end yields rise by 20 basis points. These bloody idiots who manage portfolios in these maturities will become absolutely apoplectic once rates move another 25-50 points. as if they were the fortunate recipients of Maria Fartaroma's plump lips firmly positioned in a strategic wrap around their respective market divining rods.

Dilluminati Thu, 01/11/2018 - 14:41 Permalink

articles at ZH greatly exaggerated?  In part the market is such currently that traditional value analysis isn't available, but with the other investment options and risk reward, right now treasuries are sound.  bring on the should have bought the furbies, longaberger baskets, baseball cards, comic books, shitcoin, or treasuries.