Bond Supply Weighing Down Treasuries
3Y Auction Largest Ever = Lowest Rate Ever
Today was the first of a series of large US Treasury Note & Bond Auctions upcoming. The Fixed Income sector has been under attack from the get go of trading today and the Ultra Bond is leading the way down as upcoming long end supply looms. The Cash yields are in the 30Y +8.2bp to 1.341%, 10Y +7bp to .651%. The Ultra Bond down 1.76% down 3-31 at 221-28:
Ultra Bond chart where we see an analog vs the mid May drop from 226-23 to 217 supports:
The auctions this week started off with today’s largest ever $48bn auction which saw plenty of support.
Yield was a new all time low of 0.179% with small tail to the When Issued 0.176% by a modest 0.3bps.
Bid to Cover of 2.44 slightly higher than then 6-auction average.
In-directs taking down 57.0%, far above last month's 54.3% and the recent average of 52.3% (highest foreigner take down since December 2017)
Directs taking down 12.3%, above 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)
Some other notable highlights today thus far, Gold & Silver getting monkey hammered as we warned of the psychological $30 level again yesterday.
Gold down $92.50, -4.54%
Silver down $3.145, -10.75%
That is it for now, furthermore this week we have the US Govt 10Y and 30Y auctions tomorrow and Thursday with a whopping supply of $38Bn and $26Bn respectively. We wonder how long the US Equity markets can ignore the back up in yields here. Expect volatility here as many players away on holiday.
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