Strong Demand For “Stopping Through” 5Y Paper, As Fed Looms

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.