Wednesday, October 24, 2012

2's, 3's, 5's and 7's at the highs after 5yr auction

Need i say anything more?  With another 29bln 7yr paper being sold tomorrow, is there any indication of selling to "setup" for the 7yr auction??   I don't think so either.  Demand for risk free UST paper is as healthy as ever.

I think, that the world is waiting for the Fed to say "we are watching and waiting, and will continue to monitor the economy and provide stimulus as we see necessary to lower unemployment and help the economy grow.  We see no changes to our current open market operations at this time...but will continue to monitor the situation and make changes and adjustments as we see fit in the coming months and years.  ok.thanks.bye"

In my personal opinion...its pretty ludicrous to expect the Fed to say much of anything else until after the election.  My only surprise is that bonds aren't doing even better than they are.  The extension for the month of October is pretty small (0.02 in UST) maybe that's why the weak UST price action.  Still, there is a week to go.

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