Posted on 07/29/2009 10:21:25 AM PDT by Cheap_Hessian
Treasurys fell after an auction of 5-year government debt saw another tepid response, with investors getting a yield of 2.689 percent on a swell of $39 billion in supply.
The results come a day after a similarly weak auction of 2-year notes showing a reticence for government debt as a record supply of $115 billion comes on line this week.
The bid gathered a bid-to-call ratio of 1.92 against the recent normal of 2.20.
Treasury debt prices had gained earlier as lower stocks bolstered government debt's safe-haven appeal, although investors were on edge over a record amount of new debt supply coming to market this week.
An unexpectedly sharp fall in new orders for long-lasting goods in June illustrated to investors that the economy remains in dire straits and supported bond prices.
Stocks set the tone, however, ahead of the auction, with futures slipping as investors pondered whether a recent equities rally had much staying power.
"Stock futures are down on the day, so Treasurys' reaction is tied to that," said Bulent Baygun, head of U.S. interest rate strategy at BNP Paribas in New York.
New orders for durable goods fell 2.5 percent in June, in the largest drop since January, after rising a revised 1.3 percent in May, the Commerce Department said. Economists polled by Reuters had forecast a drop of only 0.6 percent in June.
"As more reports like this come out, reinforcing the view that the economy is not on the mend just yet, we are going to see Treasurys find support," Baygun said.
(Excerpt) Read more at cnbc.com ...
Where’s Santelli been hiding? I’ve missed him on CNBC lately.
I think he was gone for a couple days last week, but he has been back every day this week. He will be a special guest for the full hour on Fast Money today if you are interested.
Kudlows multiplier effect. LOL
Obama Stagflation coming. Resurrect Jimmy Carter-era “misery index.”
To add to the national embarassment of having an unqualified Stooge Speech Reader as President, we now have Chinese officials on US soil lecturing little Timmy Tax Cheat Geithner on fiscal responsibility.
I guess Zer0, Pelosi, Reid and the rest of the witch doctor Rat economists will have to adopt Lucille Ball’s tactic of throwing a dirt ball on the carpet to get an opportunity to sell a vacuum cleaner.
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