Treasury Auction Update
By Robert Perrego, at 11:54 am on July 27th, 2009$32 Billion 3-month bills auctioned at 0.19% with a bid-to-cover ratio of 3.40
$31 Billion 6-month bills auctioned at 0.275% bid-to-cover 3.87
Both bid-to-covers showing very strong demand.
$30 Billion 1-month bills have been added to tomorrows calendar bringing the total amount to be auctioned this week to $235 Billion .
This auction showing still plenty of demand in the very short maturities indicating a lot of risk-free money looking for a home. Shorter maturities have a much lower price volatility than the longer end of the curve with much lower duration and convexity.
This auction is shorter than the 2 to 30 year maturities that make up the lions share of the yield curve with the interest rates on the very short maturities heavily influenced by the Fed Funds rate set by Bernanke and the Board of Governors at The Fed which currently stands at 0 to 0.25%.
Still on deck for the week;
20 year TIPS – 1 p.m. today
$30 Billion 1-month Tuesday
4-week bills 11:30 a.m. Tuesday
52-week bills 1 p.m. Tuesday
2-year notes 1 p.m. Tuesday
BIGGEST ISSUANCE WEEK IN DECADES
