The Treasury Department will have to pay a basis point to buyers 1 month treasury bills, the first time in a month that the market did not give their money to Uncle Sam for free.

The median yield on the auction was 0.01% with the high yield at 0.06%, Heading into year-end, the demand for liquid products like T-bills was so great that yields went negative on several occasions.

3 month bill are yielding almost 15 bp today, a sign that the credit crisis is beginning to ease at the margin, a hopeful sign for those long the reflation trade. The dollar is losing ground at the moment with EUR/USD pushing through stops at 1.3480. As risk aversion eases, any flight-to-quality bid could leave the dollar. The upside is that more normal financial markets should return.