Halister News

(Bloomberg) -- Although 30Y refundings have “long history of tailing,” reduced auction size and lowest oil prices since 2003 “should provide the needed incentive for a strong auction,” CRT strategist Ian Lyngen says in note.

• “Cautiously optimistic” on today’s $15b 30Y sale
• “Flight-to-quality rally that has pushed yields to the bottom of the range hasn’t fully run its course, although the market is clearly well into overbought territory”
• Foreign bidding is not usually large for this sector and there is “a strong tendency” for these auctions to tail
• Given general flattening trend and interest rate differentials vs comparable sovereigns, overall dealer demand “should be strong regardless of the through/tail dynamic”