10Y Yield Under Pressure From Strong Auction Demand

13 בינו׳ 2021

The risk free rate took a breather yesterday, and then again today, as (yesterday) the 10Y auction was a smash success, followed by a near record 30Y auction today. We saw $38 Billion in demand in the 10Y auction, driving yields lower, toward the 1.11% level. Then after the 30Y auction today, the 10Y yield was hammered back to 1.08%. Members of the FED made their rounds in the MSM, convincing market participants that the FED had no intention of tapering asset purchases, nor did they see the need to hike rates in the near term. Let's see how things progress as the YCC (yield curve control) conversation becomes the focus on trading desks everywhere. When will the FED institutionalize YCC? Could be as early as the next meeting on Jan 26th. But, I highly doubt they'll admit, yet again, to the world, that everything they've done, hasn't worked. Then again, I've been wrong before. who knew you could just simply change every rule in the book. I digress.

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