On Wednesday the Treasury’s five-year auction yield was 2.69% with 21.15% allotted at the high and bid to cover was 1.92 to 1. The average of the past ten auctions has been 2.20%. Indirect, central bank participation was 35.7% versus an average of 36.8%. Overall that was weak demand. Do not forget the Treasury has to raise $2 trillion by 9/30/09.
The result of these mediocre to poor auctions has to be more pressure on the dollar, as budget deficits continue to widen.
Mortgage applications fell for the first time in four weeks, driven by a drop in demand for refinancing loans. Both purchase and refi loans fell 6.3%.
This is an early appraisal of the Chinese visit to Washington. There is no question the Chinese have the Illuminists stymied. The big question is has China demanded the rest of our high technology expertise that Bill Clinton was unable to deliver to them? Or have they pledged government properties to the Chinese? (more)
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