30-Year Bond Auction A Mild Success (TBT)
March 14, 2012 by Jon C. Ogg
The latest results from a 30-Year Treasury Bond auction did not manage to turn the bond momentum back in favor of lower yields and higher prices. The bid went out at 3.38% and the good news is that investors did not sell it off more. Rick Santelli on CNBC gave it a ”B” grade, but he had the same observation that we have had: it is a shame that the much higher yields did not draw more investors back into the debt markets.
To show just how much rates have risen, the 3.38% compared to a 3.27% just in the last couple of days. The yield was about 3.12% just a week ago.
Of the bids, 29% were listed as indirect and the auction had a 2.7 bid-to-cover ratio. That bid-to-cover is deemed a good bid-to-cover in a long bond auction.
ProShares UltraShort Lehman 20+ (NYSE: TBT) is the double-short (inverse) 20+ year spectrum of Treasury bonds and its price is up 3.7% at $20.68 today. This was under $19.00 just a week ago.
JON C. OGG
