Central banks tend to love the $5 year and under sector in the US Treasury market. Solid evidence of that was seen in today’s 3-year note auction. Central banks scooped up 40% of the $34 bln in notes auctioned just over an hour ago. That’s a mere $13.6 bln. We assume most of those dollars are already here in the States gathering dust, but some could be fresh money and may help explain the dollar resurgence this afternoon.
Stops are being triggered with reckless abandon today as trapped longs head for the hills. We can’t blame them…
