Wednesday, August 10, 2011

Get 'em While They're Hot!

"Mmmmmmm, donuts.... aaaarrrrrggggghhhhh...."
Treasury bills, like donuts, are best eaten hot.  There is still a huge apetite for US debt in the world market and investors are eating their treasuries right out of the oven.
The 10 yr auction was solid with a yield of 2.14% well below the when issued range of 2.18-2.19% and the bid to cover of 3.22 was above the 12 month average of 3.11. Also, direct and indirect bidders took the most since Feb. This auction follows the very good 3 yr note auction yesterday and comes on the heels of the FOMC saying they will keep rates at zero forever. Piling into this end of the curve, yielding 2.14% at auction, only implies worries about the economy and comfort with little inflation.
Mmmmm, tasty.

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