After yesterday’s very ugly, massively tailing 10Y auction set off substantial intraday selloff across bonds, many were concerned that today’s 30Y refunding could be just as bad if not worse, and accelerate the steepening of the yield curve in the US and abroad. That, however, did not happen because moments ago the US Treasury sold $15 billion in ultra long dated paper at a yield of 3.005%, stopping through the When Issued 3.007% by 0.2bps, even though just like yesterday there was absolutely no pressure in the repo market ahead of the auction, suggesting little potential for a short squeeze. Of note: 3 of the last 4 30Y refundings have all tailed.
This post was published at Zero Hedge on Feb 9, 2017.
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