Weeks where the Treasury isn’t pounding the market with new debt are few and far between, and that should be bullish. Demand for short term paper seems insatiable with panic level bid/cover ratios on the short term bill auctions, and a record indirect bid on the 13 week bill.
The market’s problem now has to do with next week when the Treasury will float 3 and 10 year notes and 30 year bonds, in addition to the usual short term bills. It also has to do with signs that foreign central banks may be pulling in their horns. If that’s a trend, it would put the Fed and the US Treasury, and by extension–us, in an impossible situation.
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