Today at 1 PM there was a 3 year treasury auction. I am watching these auctions closely as the deficit grow's to look at demand for treasuries.. With the defecit going up demand is not a bad thing. Beware the market recognizes that yields on treasuries suck and the Chinese eventually stop lending us money. One thing I watch is the bid to cover ratio. What is it... Investopedia.com explains it better than I can.
"A ratio that compares the number of bids received in a Treasury security auction to the number of bids accepted. A ratio above 2.0 indicates a successful auction comprised of aggressive bids. A low ratio is an indication of a disappointing auction, marked by a wide bid-ask spread."
Today 30 billion were auctioned off with a bid to cover ratio of 2.21, which is pretty good considering 30 billion was a large issue. There is also something called a stop out rate. which is the lowest rate at which the issuer will accept, it was 1.200 today. (Link)
Basically Todays auction tells us that more money was borrowed at a lower rate.. there is still strong demand for treasuries.
Just a little something...
Posts
0 comments:
Post a Comment