Treasuries were mixed as the curve flattened due to a two-year selloff even though one-year bills and three year notes rallied on the day. Economic data has been light this week so many in the market are concentrating on earnings season that is right around the corner.
My comments yesterday about Treasuries looking rich with the ten-year at 3.55%, (which rallied to 3.48% yesterday… whoops!), will be truly tested today with the Treasury auctioning $19 billion in a ten-year note reopening. There is some chatter about foreign central banks, who are by nature heavy buyers on the short end of the curve, creating some problems for the Treasury by stepping even farther away from the longer duration auctions in favor of the shorter end of the curve. We will see if there is much truth to the rumors when we receive today’s results.
The $35 billion dollar three-year auction was stronger than expected and helped fuel most Treasuries higher for the day. The notes were sold at yield of 1.519% with a bid/cover ratio of 2.62, right at the four week average. Just over half of notes sold went to indirect bidders, a group of buyers that includes foreign central banks.
Cliff J. Reynolds Jr.
My comments yesterday about Treasuries looking rich with the ten-year at 3.55%, (which rallied to 3.48% yesterday… whoops!), will be truly tested today with the Treasury auctioning $19 billion in a ten-year note reopening. There is some chatter about foreign central banks, who are by nature heavy buyers on the short end of the curve, creating some problems for the Treasury by stepping even farther away from the longer duration auctions in favor of the shorter end of the curve. We will see if there is much truth to the rumors when we receive today’s results.
The $35 billion dollar three-year auction was stronger than expected and helped fuel most Treasuries higher for the day. The notes were sold at yield of 1.519% with a bid/cover ratio of 2.62, right at the four week average. Just over half of notes sold went to indirect bidders, a group of buyers that includes foreign central banks.
Cliff J. Reynolds Jr.
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