Two Year Auction

July 28th, 2009 12:04 pm | by John Jansen |

In about an hour the treasury will sell $ 42 billion 2 year notes. Central banks have been chunky buyers of the issue the last two days and the forward roll has narrowed from nearly 5 basis points to 4 1/4 basis points as a result.

If you believe Bernanke that financing will remain at zero for an extended period,then these are a steal as there is a ton of carry and roll down.

I am told that the issue at 60 basis points is on the cheap side versus the year bill and it is on the cheap side versus 3 year notes.

I also believe that the street will use this as an anchor issue versus the 5 year note and the 7 year note.

This one should go real well.

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  1. 5 Responses to “Two Year Auction”

  2. By Al on Jul 28, 2009 | Reply

    The words ‘believe’ and ‘Bernanke’ just cannot be used in the same sentence if you know what he’s been saying for the last couple of years.

  3. By John C. Lately on Jul 28, 2009 | Reply

    Al,
    All warfare is based on deception….

    John.

  4. By sbenard on Jul 28, 2009 | Reply

    I wonder what happens when the deception no longer works. Our Charlatan Chief is only now beginning to receive the message that you can’t fool all the people all the time. Likewise the Fed’s cred is dead — or eventually will be. IMHO, the sooner that happens, the better off we’ll all be.

    Treasuries selling off forcefully following today’s auction, but I have no data other than the charts to tell me what happened.

  5. By Al on Jul 28, 2009 | Reply

    John

    it looks more like plain stupidity than deception.
    Throughout his whole life he didn’t know what he was willing to do in the future. And now he happens to be the chairman of the FED. God bless America.

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