An Almost Stellar 30-Year Treasury Auction
ThinkstockThe U.S. Treasury has just sold its 3.625% 30-year Treasury bonds, or the so-called long bond, at a yield of 3.525%. The recent unsettling of the stock market recovery might have aided this offering, and a Greek bond offering for…
The U.S. Treasury has just sold its 3.625% 30-year Treasury bonds, or the so-called long bond, at a yield of 3.525%. The recent unsettling of the stock market recovery might have aided this offering, and a Greek bond offering for the first time in about four-years may have added more comfort into bidding on this bond auction.
What stood out was an impressive bid-to-cover ratio of 2.52, meaning that $2.52 worth of bids into the Treasury were submitted for every $1 accepted by the Treasury. The recent average had been put at 2.36 on the bid-to-cover. One issue that may have added to the bidding strength was that dealers were more than 38% of the auction.
What is most important here is that the auction was basically at the money with on the run Treasuries.
With the U.S. government still running large deficits and with the U.S. Debt Clock now above $17.5 trillion, the bond bears have to be wondering where on earth those higher interest rates are — and when those higher rates will finally come.
SEE ALSO: Why NBG Should Like Greece’s Bond Sale But Didn’t
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.