Yet Another Treasury Auction Goes Well

Helicopter Ben

Well, the US sold another $12 billion in 30-year bonds to stronger than expected buying.

Demand, measured by the bid-to-cover ratio (2.92) was better than the average of the last four re-openings (2.38). Indirect bidders, a measure for institutional and foreign buyers, came in above recent averages as well.

This comes to three out of three strong auctions for the week, making treasury bears sound like a broken Milli Vanilli record.

CNBC: In another sign of strong demand, the yield at the auction was below where it was trading in the when-issued market at the time of the sale, meaning dealers were not overly aggressive in bidding for lower prices and higher yields.

At what rate are people willing to loan the US government money for 30 years right now? The high yield came in at 4.238%.

Sounds like a horrible deal for foreigners in particular, but if the next 10 years are like the last, then this yield will probably beat the stock market’s returns in non-dollar terms.

Read the official release here.

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