10Y UST Auction: 'managed' to get finally a good one?

Quote from Surdo:

Sure felt like short's scrambling to cover at the end of the session....What will tommorrows's PPI bring?
More...

The most reasonable explanation I can think of behind late-day is maybe reallocation of assets into safe haven... PPI I think is gonna be more of the same, slightly above expectation but within reason...

All I know is, we got a higher low, that's all I can ask for right now
 
Wouldn't the record high indirect bidder in the TIPS be a sign someone is thinking inflation might pick up again? I don't know the answer to that but TIPS are usually preferred when someone is forecasting inflation.
 
Exactly, I wouldn't get too bullish Treasuries if there was huge demand for inflation hedges (which is essentially what TIPS are) even if they are cheaply pricing inflation. Seems like the dealers are more willing to sell size into the uptick then get crazy long just yet. They have probably flattened a bit since earlier this week, so there may be more of an underlying bid, suprise PPI (vol has to pick up sometime) and the bottom completely drops out of the market and the near record longs puke up their enormous position. Most dealers looking for bearish steepening but their timing is way off as of late.
 
Quote from cornholetrading:

Wouldn't the record high indirect bidder in the TIPS be a sign someone is thinking inflation might pick up again? I don't know the answer to that but TIPS are usually preferred when someone is forecasting inflation.
More...

If we don't get much of a bid for regular ten yrs then ya I think that would definitely be a sign that foreigners are scared.
 
I don't know if you are joking or not but Bank One (which is doing the business for the Countrywide Mortgage Service Hedging Desk) bought a boatload of the May 110 calls this morning immediately after PPI and throughout the day. Probably about 15,000 to 20,000 all day, he is long long size in the March 111 calls (about 40,000). I would look for big convexity buying around those corresponding yield levels in cash. Finally decided to reverse and get long a few today, got smoked trying to short this market later this week.
 
Quote from mcurto:

I don't know if you are joking or not but Bank One (which is doing the business for the Countrywide Mortgage Service Hedging Desk) bought a boatload of the May 110 calls this morning immediately after PPI and throughout the day. Probably about 15,000 to 20,000 all day, he is long long size in the March 111 calls (about 40,000). I would look for big convexity buying around those corresponding yield levels in cash. Finally decided to reverse and get long a few today, got smoked trying to short this market later this week.
More...

Ya, felt this market fell off a cliff after the lousy auction in 5s, I think we need to make higher highs soon on good volume or we may be in another sideways market... Speaking of mortgages/convexity, housing numbers coming out soon, hope they get the same reaction they did last time...

thanks for the info
 
You must log in or register to reply here.
Back
Top