Here Comes the First 2012 U.S. Bond Auction
The week of January 8 presents the first 2012 U.S. government bond auctions.
The 10-year U.S. Treasury yield is my number one indicator for 2012 -- the ultimate indicator of whether a generational reallocation out of Treasuries will foster a powerful advance in all risk assets.
Unfortunately, yields continue to trade at the lower end of 2011’s 1.67% to 3.76% range (Figure 1.1). In fact, since November 1, the 10-year has traded in a very tight range between 1.79% and 2.16% (Figure 1.2). A sustained breakout above 2.05% would be an encouraging first step.
This week’s Treasury auction schedule
• Monday, January 9
o $29 billion in 3-month bills to be sold
o $27 billion in 6-month bills to be sold
• Tuesday, January 10
o Fed purchases $1 billion to $1.5 billion in notes
o Treasury sells 4-week bills
o $25 billion in 52-week bills to be sold
o $32 billion in 3-year notes to be sold
• Wednesday, January 11
o $21 billion in 10-year notes to be sold
• Thursday, January 12
o $13 billion in 30-year bonds to be sold
Figure 1.1 U.S. 10-Year Treasury Yield, Past 52 Weeks
Figure 1.2 U.S. 10-Year Treasury Yield, November 1, 2011 to January 6, 2012