The 10 year auction and twist operation show caution
Investors are cooling toward treasuries. Today's twist operation saw $5.901 bln in offers to sell '36 to '42 paper to the Fed. The Fed bought a high $1.95. The accepted to submitted ratio plunged to 32.98% which is well below the recent average of 45.79%. Likewise, demand for the 10 year treasury auction results were soft. The bid to cover was the lowest since August 2009 at 2.49. The spread between the high and median yield was above average at 5 bps, while dealers took 54.2% of the auction -- the largest since October 2011. Signs of soft demand have pushed prices below yesterday's low in the 10 year T-note contract.
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*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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