3Y Note Yields Most Since May 2007 In Ugly, Tailing Auction As Foreign Buyers Flee

After yesterday's two-fer shocker, when the Treasury sold 3 and 6-month bills at the lowest Bid to Cover in a decade as demand for papers suddenly pulled away, today's 3Y coupon auction was no better, and moments ago some $34BN in 3 year paper was sold at a high yield of 2.765%, tailing the When Issued 2.763% by 0.2bps (the 5th consecutive tail in a row for this tenor), and the highest yield since May 2007.

The yield, however, was not enough to generate interest, and while the Bid to Cover rose from 2.51 last month to 2.65, but well below the 6 month average of 2.814, the internals were downright ugly, as Indirects took down just 42.7%, the lowest since December 2016, and with Directs taking 12.1%, it left Dealers taking down 45.2% of the auction, the highest share going back also to December 2016.

Overall, a very ugly auction, which better not be a harbinger of what to expect from tomorrow's benchmark 10Y sale or else the bond market may be facing a major hanogver very soon.

Comments

MoreFreedom 1stepcloser Tue, 08/07/2018 - 14:33 Permalink

Perhaps the question to ask is: If the politicians running government had to redeem paper money for gold at a fixed price/$, would it be borrowing money,  or restraining itself from spending because it'd have to tax people now to raise the money it wants to spend?

 

The answer to your question if the government had to redeem gold for paper money, is that it wouldn't be increasing the debt because it wouldn't be able to provide gold for all that worth less paper. 

 

In reply to by 1stepcloser

Al Huxley Tue, 08/07/2018 - 13:41 Permalink

We don't need foreign buyers for our debt - fuck them all!  We have plenty of patriotic AMERICANS ready and willing to step up to the plate and buy our debt.  

Moe Howard Tue, 08/07/2018 - 14:27 Permalink

The final goal = all currency digital, all transactions recorded as to what was spent and for what, banksters skim a percentage of every transaction, every transaction taxed, local, state and national, what was purchased data sold to the highest bidder, example, tobacco sales, junk food, etc, purchase data sold to your health insurer. 1984 nightmare looks like a pleasant dream compared to what these assholes have in store for all of you plebs and serfs. However, I personally suspect I will be dead before the final implementation.

 

First the old system must die for the "Phoenix" to rise from the flames.