Select Page

Strong 30Y Auction Eases Frayed Bond Trader Nerves

Following yesterday’s dismal 10Y auction, which saw the lowest bid to cover in a decade as Indirect bidders tumbled, prompting speculation that China was purposefully boycotting the sale, earlier today we warned to keep an eye on today’s critical 30Y bond sale, as a similar disastrous reception would suggest that Beijing has indeed decided to spook the US bond market and could potentially lead to a rout across the curve as Beijing flexes its muscle.

https://platform.twitter.com/widgets.js

Well, the 30Y auction has come and gone, and… there was no shock, because unlike yesterday’s disastrous 10Y auction, today’s 30Y was llike a walk in the park by comparison.

While the auction priced at 2.982%, tailing the When Issued 2.890% by 0.2bps, this was far less than the 1.4bps tail that shocked traders yesterday. Furthermore, this was the lowest yield on the 30Y since January 2018, avoiding the reversal that was observed in yesterday’s 10Y auction.

The internals were even better, with the Bid to Cover dippined only modestly, from 2.25 in April to 2.20 in May, which while below the 6-auction average of 2.22% was nowhere near the 10year low BTC printed yesterday, and was even higher than the 2.19% print in January. And indicating that China had no intention to send any signals today, Indirects took down 60.5% precisely the same amount as April, with Directs dipping modestly from 14.4% to 11.0%, the lowest since November, while the Dealers take down increased from 25.1% to 28.5%, the highest since November.

Overall, while hardly a spectacular auction, today’s sale of $19 billion in 30Y paper was orders of magnitude better than yesterday’s 10Y disaster, and so bond traders who were bracing for the worst, can finally exhale.


This post has been republished with permission from a publicly-available RSS feed found on Zero Hedge. The views expressed by the original author(s) do not necessarily reflect the opinions or views of The Libertarian Hub, its owners or administrators. Any images included in the original article belong to and are the sole responsibility of the original author/website. The Libertarian Hub makes no claims of ownership of any imported photos/images and shall not be held liable for any unintended copyright infringement. Submit a DCMA takedown request.

Read the original article.

About The Author

Tyler Durden

Zero Hedge's mission is to widen the scope of financial, economic and political information available to the professional investing public, to skeptically examine and, where necessary, attack the flaccid institution that financial journalism has become, to liberate oppressed knowledge, to provide analysis uninhibited by political constraint and to facilitate information's unending quest for freedom. Visit https://www.zerohedge.com

Leave a reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Welcome

Bringing together a variety of news and information from some of today’s most important libertarian thought leaders. All feeds are checked and refreshed every hour and pages auto-refresh every 15 minutes. External images are deleted after 30 days.

Time since last refresh: 0 second

Publish Your Own Article

Follow The Libertarian Hub

 

Support Our Work

Support the Libertarian Hub by tipping with Bitcoin!

Send BTC:
19PU2K7448gKxAvisR5cF6X5RquYfWu5vZ
Weekly Newsletter SignupTop 5 Stories of the Week

Subscribe to our newsletter to receive a weekly email report of the top five most popular articles on the Libertarian Hub!