With the overseas woes of Cyprus and Europe, we are closely monitoring the Treasury Note auctions on what is a shorter pre-holiday week. Unfortunately, the 7-Year Treasury Note auction seems to have missed the mark. The good news is that this is at least when the S&P 500 Index is hitting new all-time highs after the DJIA already hit new highs. It may simply be that the risk-on appetite is trumping any flight to safety, and many investors from around teh country and Western Europe already being out early for Easter.
The $29 billion 1.125% coupon (1-1/8) went off at a discounted price of $99.1782 and this appears to be the lowest demand in six months for the 7-year note auction. Indirect bids were 35.5%, over 2 points shy of normal. The lowest yield for the pricing 1.248% with a bid to cover of what we calculated as 2.56. Investors are likely to focus on the more liquid and key 10-year Treasury Note based upon this auction. That yield is now 1.857%.
our take is that the strength in equities is more of the issue today. The Junk Bond Composite Spread measured by S&P was down to 509 basis points yesterday and stocks are hitting record highs. We hate to just ignore data but we are going to chalk a disappointing 7-Year T-Note auction simply to being interest elsewhere and due to the shortened work week with many A-Team Wall Streeters already being out for the week.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
