Treasuries Auction

The recent US 10 year treasury note auction of $27B saw a tepid response with bid cover ratio of 2.17, the lowest in a decade. 2.17 figure here corresponds to the demand for the treasuries i.e. there was 2.17 times demand for them. US debt has ballooned to 22T with 3.9T sitting on the FED balance sheet. The US will have to be very careful with it’s budget deficit going forward taking due diligence of law of economics into consideration. The 10 year yield at 2.49 is on par with yields on a 6 month Treasury bill at 2.45 highlights further concerns of investors. US Treasuries are still the safest haven for investors but it seems soon investors might start looking at commodities like Gold as a replacement for safe investing. Euro is structurally flawed although Scandinavian debt would look good as an asset class diversification. Financing has been a major hurdle for building infrastructure projects and this article will be expanded soon. Like Pulp Fiction movie, all dots will connect at the end of this rapidly building interesting article.

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