Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Record Big 3Y Auction Prices At Record Low Yield, Despite Unexpected Tail

Courtesy of ZeroHedge View original post here.

As previewed last week, a record big $112BN quarterly refunding auction kicks off today with $48BN in 3-yr Notes, a record size for the tenor with yields edging up from 11bp to 15bp in the last week to make room for the supply.

AS SocGen’s Kit Juckes notes, while selling humungous amounts of debt in the middle of August would never be easy – and with
large swathes of the market working from home, the whole process gets even harder – in this financial market enactment of the fight between King Kong and Godzilla, he expects the world’s voracious appetite for safe assets to swallow up the US government’s massive funding needs with barely a burp.

Was he right? Well, one month after the US sold a record amount of 3Y paper at a record low yield, it did so again at 1pm today, when the Treasury placed a record $48BN in 3Y notes at another record low yield despite the recent rebound in yields.

To be sure, there was a small burp, because while the yield was a new all time low of 0.179% which benefited from the modest concession resulting from the recent selloff in rates, it did tail the When Issued 0.176% by a modest 0.3bps. That said, the market is still making it quite clear that it does not expect any rate hikes for more than 3 years.

The Bid to Cover of 2.44 was unchanged from last month, and just fractionally higher than then 6-auction average.

Finally, the internals were extremely solid with Indirects taking down 57.0%, far above last month’s 54.3% and the recent average of 52.3%; in fact it was the highest foreigner takedown since December 2017.

And with Directs taking down 12.3%, effectively on top of the 11.1% six auction average, Dealers were left holding 30.7% of the auction, below the 41.3% recent average and the lowest since December 2019.

Overall, a stellar auction despite the modest tail, and as Juckes said, a tremendous start to a record large refunding week.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!