So much for the bond rally

Real money didn’t show up at the 30-year Treasury sale today.

The market was looking for a yield of 4.716% but the Treasury had to pay 4.769% at the dutch auction to unload all $24 billion. That’s a bad sign on real demand for bonds and suggests that a good portion of the recent retracement in long-end yields was about positioning rather than demand.

Non-dealer biddings was just 75.3% of the take-down versus 87.9% on average.

We’ve seen some bad 30-year auctions in the past year but this might be the worst one yet.

For broader markets, it’s bullish for the US dollar and bearish for risk assets. The entire basis of the latest equity rally was on a top in yields and I wouldn’t be feeling so confident about that after this sale.