A PAUSE IN THE DAY'S OCCUPATIONS...

Treasury sold a bundle of 7 year notes today at a 3.30 yield. This was a debt replacement operation, debt that was carrying a yield of some 85-90 basis points lower. Coupled with the stinker of an auction on Wednesday in the 10 year there seems to be a gereral theory that interest rates are going to be one a one-way street for a while. BUT, the DJIs closed UP 103 points as though nothing was amiss, AND at the end of the session, the 10 year ticked slightly down to a 3.67 yield even in the face of the Pimco Pundit who likes the 10 year at 3.75--4.00. Go figure...which is what I am going to do with reactions from some smart people I know. The coverage ratio was good in both operations so maybe that's the answer. Who bought em? Back tomorrow.