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June 28, 2017 By Peter Boockvar

7 yr auction mediocre in midst of possible mood change


After a solid 2 yr note auction and a weak 5 yr (which came in the midst of yesterday’s messy Treasury day), the 7 yr today was mediocre. The yield at 2.056% was a touch above the when issued. The bid to cover of 2.46 was slightly below the one year average of 2.53. Direct and indirect bidders took a combined 75% of the auction, slightly less than the 12 month average of 78%.

Bottom line, the $64k question now is whether Mario Draghi’s comments is a game changer for global bonds because of the tight correlations. Even though the ECB tried to take back his speech, the euro is still higher, European bond yields are only slightly lower and US yields are up. Fundamentally, if healthcare gets passed soon and gives people hope that tax reform will soon follow, long end yields will move higher. If the Fed keeps tightening into a slow economy, they will fall. I’m of course stating the obvious on these two fundamental factors but what is not obvious is how US Treasuries will trade if we see continued weakness in European sovereigns.

Filed Under: Latest Data

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About Peter

Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.

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Disclaimer - Peter Boockvar is an independent economist and market strategist. The Boock Report is independently produced by Peter Boockvar. Peter Boockvar is also the Chief Investment Officer of Bleakley Financial Group, LLC a Registered Investment Adviser. The Boock Report and Bleakley Financial Group, LLC are separate entities. Content contained in The Boock Report newsletters should not be construed as investment advice offered by Bleakley Financial Group, LLC or Peter Boockvar. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. The views expressed in this commentary should not be taken as advice to buy, sell or hold any security. To the extent any of the content published as part of this commentary may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person. No chart, graph, or other figure provided should be used to determine which securities to buy or sell. Consult your advisor about what is best for you.

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