Wrapping up the week’s sales, the 7 year auction was good as the yield was right in line with the when issued and the bid to cover of 3.04 is above the 12 month average of 2.82 and the highest since they were reintroduced in Feb ’09. The current dynamic in the US Treasury market are quite amazing, albeit highly distorted, as on one hand we have the influence of rising commodity prices and an ever depreciating US$ and the other, the Fed’s printing press and the deflation believers.
