Interest Rate Roundup

Monday, January 26, 2009

Stinko 20-year TIPS auction

The Treasury just sold $8 billion of 20-year TIPS at what looks like a stinko auction. The notes were sold at a yield of 2.5% versus pre-auction talk for a yield of 2.37% (per Bloomberg). The bid-to-cover ratio came in at 1.92, compared with an average of 1.98 for the past five sales. Indirect bidders bought 54% of the notes issued, below the five-auction average of 57.2%.

Long bond futures fell on the news, recently down 31/32 to a price of 128 20/32. Ten-year yields are up about 5 basis points. Next up: $40 billion in 2-year notes tomorrow and $30 billion in 5-years on the 29th.

2 Comments:

  • So... lower-than-expected yields means TIPS are in high demand?

    By Blogger SF Mechanist, at January 26, 2009 at 11:09 PM  

  • Long term treasuries are in trouble. Bernanke jawboned today about buying the long bond and the bond market shrugged and went lower. I just don't think he can buy enough to make a difference without destroying the dollar.

    I made a post about TLT (20+ year treasury ETF) back on the 11th calling for a price target of 83 by February 15th. I still think we are on our way there: http://soyouthinkyoucaninvest.blogspot.com/2009/01/technical-analysis-of-tlt.html

    By Blogger SoYouThinkYouCanInvest, at January 27, 2009 at 12:12 AM  

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