Subpar 3Y Auction Stops Through Despite Pullback In Foreign Buying
Subpar 3Y Auction Stops Through Despite Pullback In Foreign Buying
The week's first coupon auction just priced, and it was quite solid, taking advantage of the broader risk off mood.
At 1pm ET, the Treasury sold $58BN in 3Y paper, at a high yield of 3.576%, up from 3.485% last month but not that far off the lowest high yield in the past three years. The auction stopped 0.8bps through the 3.584% When Issued, the biggest stop since February.
The bid to cover was 2.663, down modestly from 2.726 last month but above the six auction average of 2.550.
The internals were a tad soft, with Indirects taking 62.7%, down from 74.2% in Sept and also below the 64.1% six-auction average.
And with Directs jumping to 26.6% from 17.4%, that left just 10.7% to Dealers, just shy of the lowest on record.
Overall, this was a softish auction which despite the pullback in foreign buyers, did not have a problem stopping through amid the broader risk off that has seen yields slide for much of the session and hit a LOD just after the auction priced.
Tue, 10/07/2025 - 13:19
The bid to cover was 2.663, down modestly from 2.726 last month but above the six auction average of 2.550.
The internals were a tad soft, with Indirects taking 62.7%, down from 74.2% in Sept and also below the 64.1% six-auction average.
And with Directs jumping to 26.6% from 17.4%, that left just 10.7% to Dealers, just shy of the lowest on record.
Overall, this was a softish auction which despite the pullback in foreign buyers, did not have a problem stopping through amid the broader risk off that has seen yields slide for much of the session and hit a LOD just after the auction priced.
Tyler Durden | Zero Hedge
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Subpar 3Y Auction Stops Through Despite Pullback In Foreign Buying | ZeroHedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
As of about two weeks ago, Grenell confirmed that contacts with the Maduro government had been ongoing, however, this statement caught other top members of the administration - especially Secretary Marco Rubio - off guard.
Another big development, following the Pentagon's at least four strikes thus far on boats believed involved in drug smuggling operations, is the revelation of a classified legal opinion from the DOJ providing cover to use military force against an expanding list of cartels and suspected drug traffickers.
"The opinion, which was produced by the Justice Department’s Office of Legal Counsel and has not been previously reported, argues that the president is allowed to authorize deadly force against a broad range of cartels because they pose an imminent threat to Americans," 
Payson explains, “This, right now, is the very beginning of the AI Revolution..."
" I work with industry peers, executives and marketing experts daily.
Half believe that AI integration was not as bad and won’t be as bad going forward because this year was not a disaster. However, the other half believe it was a disaster because they experienced department cuts and hiring freezes all due to AI.
In fact, I have a good friend where her son was denied work as an intern this summer before college because AI took the job.”
Payson goes on to say, “If we look at this and say what should younger people do? There is no easy answer here..."
" We are at the very beginning of the AI Revolution, and that is exactly what this is. This is no different than the Industrial Revolution. This is going to be a time where we are changing. This is just like Google revolutionized what happened in search . . . AI is going to revolutionize everything. The difference is there will be no sector, no category that will not be touched by AI. . . . For decades, businesses cut cost by offshoring and outsourcing . . .. In both cases, people still did the jobs. This time is different. AI does not hand the work to another human. It deletes the need for humans in entire categories of work. This shift will be bigger, faster and more permanent than all waves combined.”
Payson brought some real-world sources to back up what he is finding. Payson says, “The 
According to the documents, the request came from the vice president’s national-security adviser and was relayed inside the intelligence community by Biden’s Presidential Daily Brief briefer: “I just spoke with VP/NSA and he would strongly prefer the report not/not be disseminated. Thanks for understanding.”
A senior CIA official described the intervention as “extremely rare and unusual,” saying the material otherwise met the threshold for distribution to U.S. officials working on Ukraine policy.
The report compiled reactions from officials in the government of then-President Petro Poroshenko following Mr. Biden’s visit. Those officials “privately mused” about U.S. media scrutiny of Hunter Biden’s business ties in Ukraine and “viewed the alleged ties of the U.S. Vice President’s family to corruption in Ukraine as evidence of a double-standard within the United States Government towards matters of corruption and political power,” the CIA relayed. The same officials “expressed bewilderment and disappointment” that the vice president did not engage in expected substantive discussions with Mr. Poroshenko or other senior figures, 
The gold price (and arguably stock prices, and arguably house prices in many markets) is sending a signal that such a general inflation is already underway. Some might quibble with that characterization, pointing to EM central bank buying as a the main driver of the gold price rally, but why are those central banks buying gold in the first place? Does the breakdown of the liberal globalized trading system that drove inflation lower and lower for decades presage lower, or higher, inflation in the future? Perhaps the answer to that question explains why the 10y Treasury yield busted through the top of a 40-year trend channel in 2022 and has stayed up there ever since?
Signs of breakdown of the globalized trading system are not hard to find. Fears have been stoked in Australia after China’s state-owned China Mineral Resources Group placed a ban on Dollar-denominated purchases of iron ore from Australia’s BHP. Australian politicians have sought to downplay the action as a “commercial matter” related to pricing, but the real tell is that iron ore shipments denominated in Chinese Yuan continue to flow.
The international market for iron ore is monopsonistic – China is the only buyer of scale because China produces ~54% of global steel output. The market has also, historically, been oligopolistic, with Australia and Brazil being the two suppliers of scale who could feed China’s insatiable demand for the raw material. However, that is changing as Chinese demand moderates and supply sources are diversified by Belt and Road-backed (not a coincidence) Simandou mine in West Africa coming online. Those factors have seen China gain market power over Australia, and it appears that China is now using that market power to pressure Australia to receive payment for what is (by far) it’s most important export in CNY, rather than USD.
This episode is likely to be much larger than a commercial disagreement between a mining company and an importing company (whose state-backed nature should not be forgotten). Xi Jinping was clear at last month’s Shanghai Cooperation Organisation summit that he wanted to increase the global role of the CNY, and thereby chip away at the USD’s position as the world reserve currency. That would weaken the US’s ability to use the Dollar as a weapon by applying sanctions, increasing the cost of Dollar-denominated borrowing or cutting other countries out of the SWIFT payments system.
A logical next step could be for Chinese exporters to require Australian importers to pay for manufactured goods in CNY, rather than Dollars. Using China’s market power as a major exporter of goods would create demand for the currency that they are offering in exchange for Australia’s exports, and pry Australia further away from the Dollar. Of course, the United States does not want this to happen and neither does Australia, because it wants Dollars to pay for its imports from every other country and also to pay for the AUKUS submarines that it has committed to buy from the United States.
Is China about to tell the Land Down Under that it is time to choose? We’ve been warning of those sorts of risks in this missive for years now. Economic statecraft (not collaborative free trade policed by the WTO) is the law of the jungle, and it’s eat or be eaten.
The plant supplies about 40% of all aluminum sheet used by U.S. automakers, making it a very critical production node for America's auto industry. WSJ noted that Ford is the mill's largest customer and primarily uses the lightweight industrial metal for its top-selling and most profitable model, the F-150 pickup.
Shares of Ford in New York were hammered on the news by midday, down 7%, marking the worst intraday decline in eight months.
WSJ cited industry analysts who warned the impacts of the mill's closure are widespread:
Novelis produces more than 350,000 metric tons of sheet aluminum annually for the automotive industry, according to industry analysts. Around a dozen automakers get aluminum from Novelis, including Ford, Toyota, Hyundai, Volkswagen and Jeep maker Stellantis, according to a regulatory filing.
Kaustubh Chandorkar, an aluminum-industry analyst, said this incident "represents a serious question for the production of F-150 because that's the aluminum that comes out of Oswego." He pointed out that the automaker switched the F-150's exterior skin from steel to aluminum about a decade ago.
"Since the fire nearly three weeks ago, Ford has been working closely with Novelis, and a full team is dedicated to addressing the situation and exploring all possible alternatives to minimize any potential disruptions," a Ford spokesperson stated.
Novelis, owned by India's Hindalco Industries, is preparing to mitigate production losses in the U.S. by sourcing the metal from overseas plants in Europe, Brazil, and South Korea. However, a 50% tariff on imported aluminum complicates things.
This incident could trigger one of the most severe supply shocks for North American automakers in years. All eyes are on Ford's upcoming earnings call for more details on the situation, as well as on its Dearborn Truck Plant and Kansas City Assembly Plant, for any signs of slowing production that would only signal snarled supply chains.
<a href="theinformation.com/subscribe_h?utm_source=google&utm_medium=paid&utm_campaign=kd-us-brand-20240513&utm_content=699191628644&utm_term=aud-1155974031526:kwd-296571223120&gad_source=1&gad_campaignid=21283667437&gbraid=0AAAAADNJgqRiNAsqFHY4jfKgVLh0agzKq&gclid=Cj0KCQjw9JLHBhC-ARIsAK4PhcokVYwT-Xqazfk3rwaOrD7ATUEyT8MRlbUmVmNB2zDpk5gv27ZVnt8aAlxTEALw_wcB" rel="nofollow">The Information reports</a> that internal documents show the fast-growing cloud business has had razor-thin gross profit margins in the past year or so, lower than what many equity analysts have estimated.
In the three months that ended in August, Oracle generated around $900 million from rentals of servers powered by Nvidia chips and recorded a gross profit of $125 million—equal to 14 cents for every $1 of sales, the documents show. That’s lower than the gross margins of many nontech retail businesses.
As sales from the business nearly tripled in the past year, the gross profit margin from those sales ranged between less than 10% and slightly over 20%, averaging around 16%, the documents show.
In some cases, Oracle is losing considerable sums on rentals of small quantities of both newer and older versions of Nvidia’s chips, the data show.
In the three months that ended in August, Oracle lost nearly $100 million from rentals of Nvidia’s Blackwell chips, which arrived this year.
That’s partly because there is a period between when Oracle gets its data centers ready for customers and when customers start using and paying for them, the documents show. It’s not clear what causes the gap or how Oracle plans to shorten it.
Stocks (broadly) and crypto were both hammered lower on the report.
“The flag installations have begun at Steak n Shake,” the company said. “Every Steak n Shake is getting the tallest and biggest American flag that local governments will allow! Steak n Shake proudly supports American values and traditions.”
The flag installations have begun at Steak n Shake.
Every Steak n Shake is getting the tallest and biggest American flag that local governments will allow!
Steak n Shake proudly supports American values and traditions. 🇺🇸 
Emergency responders discovered her alive but in a life-threatening condition, after one or more attackers tried to kill her, after which she was still conscious enough to crawl inside of her home. German sources 
SPD parliamentary group leader in Berlin, Matthias Miersch, issued a statement saying he hopes she will "survive the terrible act" - but offered no further details in terms of circumstances or possible motive.
developing...
In response, some government officials have alleged that he’s exceeding his legal authority by disregarding certain limits Congress placed on his ability to federalize the National Guard.
The resulting controversy has raised questions about the balance of power between state and federal governments.
Trump has already encountered legal battles over his attempts to federalize state National Guard troops, in part due to a 
Chicago
Trump and Republicans have long held up Chicago as an example of a crime-ridden city in the United States. Trump criticized Illinois Gov. J.B. Pritzker on social media in August for not controlling crime in his state.
“He better straighten it out, FAST, or we’re coming!” Trump 
While protests have occurred at an ICE facility near Chicago, the lawsuit said the protests would be a “flimsy pretext” for sending in troops. “ICE continues to operate the facility to process the hundreds of individuals it has detained in recent weeks,” it said.
White House spokeswoman Abigail Jackson has defended the president’s actions.
In a 
Washington
National Guard troops remain in the nation’s capital nearly two months after Trump initially deployed them over concerns about crime. Leavitt said on Oct. 6 that troops remain in Washington because both the mayor and Trump recognize their presence helps keeps the city safe.
The commanding general, Brig. Gen. Leland D. Blanchard II, said the National Guard will extend its encampment through Nov. 30. The nation, Blanchard 