Thursday, May 7, 2009

30-Year Treasury Auction Update: "Messy"'s Market Update has a succinct summary of the auction result:

"1:30 pm : Stocks have retreated to a fresh session low in the wake of a messy bond auction, which had plenty of subscribers (offering covered more than 2-to-1 by bidders), but it failed to offer the yield that was desired. That has prompted many traders to dump Treasuries.

"In turn, the 30-year Bond has shed 46 ticks, which has pushed its yield up to 4.25%. Meanwhile, the benchmark 10-year Note is down 26 ticks, which has lifted its yield to 3.27%."

And here is the detail from Bloomberg: Treasuries Tumble as Bond Sale Draws Higher-Than-Forecast Yield

(11:52am PST) 30-year Treasury auction was the smallest in $ amount among this week's offerings. And yet it has turned out to be the party pooper for the market - not the stress test leaks, not the GM share dilution. Who could have known?


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