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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (7874)	2/12/2004 2:39:34 PM
From: mishedlo	Respond to of 110194

10-year Treasury Auction Brian Reynolds An OK auction The three-day Treasury refunding came to a close with the auction of 10-year notes. They came at a yield of 4.06%, with a bid-to-cover ratio of 2.0, a little better than the average 1.85 of the last year's worth of 10-year auctions. In the hour leading up to the auction, the 10-year gained almost a quarter-point, then gave up those gains and more in the minutes before the 1:00 PM deadline as bidders seemed to quickly get cold feet. Right before the deadline, the new issue was trading at a 4.06% level in the "when-issued" market, so the auction came in in-line with pre-auction levels. The drop in prices probably coaxed enough bidders into action to make this an "OK" auction. Foreign participation was at the high end of the recent range, but not above it as many had feared. The net of the refunding process was that it generally went well. That means the action now turns to corporates, where we have noted that we have begun to see initial, tentative signs of institutional support. If that continues, it would be a positive factor for equity prices.