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10Y Yield Under Pressure From Strong Auction Demand

Long
TVC:US10Y   US Government Bonds 10 YR Yield
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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Comments

Feds are a bunch of idiot PhDs. In France, they torched their Central Bank. I think that will happen here as well once people get pissed at the Fed policies. A lot of momentum to limit the Fed has happened recently. Giving free money to people is worse than the Pandemic itself. The deficits are higher than ever before and all will be called out in a large leverage collapse. timeline 18 months from April 2020 is already predicted, just waiting to spark anytime.
+2 Reply
@VolkerRules, Agreed. I think today Bidein will shock markets with a multi-Trillion dollar proposal. The "leaked" number is $2 Trillion. But, the reality is $2 Trillion is a drop in the bucket. It's not going to do anything for the real economy (GDP), other than get the ultra-leveraged robinhood crowd hyped af, and potentially cause a blow off top of sorts in equities. Yields are already rising again, and the more the national debt grows, the more investors will realize that normalization is impossible without a significant about of debt being written off banks balance sheets. It's time for the banks to take losses on their high risk loans. Always appreciate your insights buddy. Cheers!
Reply
Thanks for this idea.
+1 Reply
@abel11, You're most welcome, my friend! Thanks for the comment.
Reply
great idea
+1 Reply
Hedge_Of_The_World Mark_demariya
@Mark_demariya, Thanks so much, Mark! I appreciate that.
Reply
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