The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

The $27b 7 yr note auction and last of the week was solid (as were the prior two this week) as the yield was about 1-2 bps below where the when issued was priced right before and the bid to cover of 2.82 was the highest since they were reintroduced in Feb and above the average of 2.29 in the prior four auctions. The level of indirect bidders totaled 67.2% well above the average but is apples to oranges now in comparison as the Treasury has altered how they calculate the number. The Treasury comes to market in two weeks with a 3, 10 and 30 yr. With the Fed’s QE policy still firmly on track based on yesterday’s statement and no change in fiscal policy in DC, we have to wonder why there is such strength and whether it’s because of new concerns with economic growth or something else. Either way, the Treasury sales were a success this week.