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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
|---|
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S&P National Bond Index
|
3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
|
3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
|
1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Who are the direct bidders at bond auctions? |
MarketWatch - Feb. 12, 2010
For years, bond markets have paid close attention to how much of each Treasury auction goes to a group called indirect bidders, because the group includes foreign central banks and is considered a real-time proxy for what sovereign investors – who hold almost half of all outstanding Treasurys – think about buying U.S. debt.
But in recent months, more attention has been paid to a group called direct bidders. It didn’t used to matter because that group only bought about 1% of any given bond auction, but now their purchases have gotten big. Direct bidders bought a record 24% of Thursday’s 30-year bond auction. The group bought more than 10% of this week’s 3-year and 10-year note auctions.
So who are the direct bidders? Some analysts have used data released by the Treasury a month after the auction to conclude that it’s domestic money managers making most of those bids. Yes, that’s U.S. investors buying more of their own government’s bonds.
Another theory is it may be coming from firms that want to become primary dealers, joining the 18 existing dealers who are basically market makers — required to bid at Treasury auctions. They also trade directly with the Federal Reserve in its daily money-market-type operations, including repurchase agreements.
The other possibility is it’s simply domestic fund managers shifting their bids away from dealers and going directly to the Fed via the electronic system that many now have access to, said Bill O’Donnell, head of Treasury strategy at primary dealer RBS Securities.
“What we are seeing is another leg in the shift from an over-the-counter market to an electronic one,” he wrote in a research note Friday. “This process began with the invention of the fax” and has moved through a few systems since then.
“Throughout this period your author has heard that each advance would break the markets, and the dealers in particular,” O’Donnell said. “Well, this dinosaur is still here and the market lives to fight another day.”
“What we all need to do is to group directs and indirects together to divine retail interest,” he said.
On a day-to-day basis in the market, all traders and analysts really care about with this is that a smaller proportion of each auction goes to dealers, because dealers tend to have to redistribute the new debt, pressuring prices lower. As long as a big chunk is being bought by indirect and direct bidders, market watchers consider it a good thing – for investors and for the U.S. government.
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| Stuff to look at |
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