While yesterday’s unexpectedly strong 2Y auction left many scratching their heads (recall 2Y net specs are the shortest on record, betting on ever higher short-end rates), today’s sale of $34 billion in 5Y paper was just as strong, if not quite as perplexing as neither technical positioning, nor a hawkish Fed announcement in less than an hour would have as negative an impact on the price of the tenor. This was the highest yield for a 5Y auction since the 1.95% yield in March.
This post was published at Zero Hedge on Jul 26, 2017.
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