“Today's sale of $32B in 10Y notes had to be priced at a high yield of 3.985% and promptly tailed when Issued by 2.7bps. Of the past 5 10Y auctions, 4 have tailed or had stop throughs of more than 2bps, a degree of volatility never seen before. What does this mean? Even a moderately sized auction pushes down price (pushes up yield), a sure sign of poor liquidity. Why does this matter? We think the Treasury may be headed for a crisis where issuance exceeds market's appetite.”
-Seabridge Gold Investor

Luke Groman’s Response:
“DXY bounces from 101 to 105 and right on cue, UST auctions get notably weaker.

If Powell wants to be Volcker and not Burns, he will have to be willing to stand aside as a UST auction fails.

That ain’t gonna be allowed to happen, IMO.”

Larry Leopard’s response:
“Holy shit. A 2.7bps tail is close to failure, correct?”