However, this might mean that resources are shifting out of bonds and into equities? In any case, it looks like interest rates are going up.
July 29 (Bloomberg) -- Treasuries fell for a second day after the government’s record $39 billion auction of five-year notes drew a higher-than-forecast yield, renewing concern the deluge of U.S. debt being sold will overwhelm investor demand.
The notes drew a yield of 2.689 percent, compared with a forecast of 2.635 percent in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. Indirect bidders, a class of investors that includes foreign central banks bought 36.7 percent of the notes, down from 62.8 percent of the securities at the June sale, the highest since December 2004.
“You’re starting to see customers pull back from the market,” said Thomas L. di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC
The only thing you have to worry about here is if the fall-off in Central Bank buying is so large that the Powers That Be will deliberately plunge the equity markets in an effort to get money to flow back to Treasuries and support a low cost of borrowing by the Government. Ya never know how TPTB will be moving the chess pieces.
Uh... I think I mentioned that possibility when I said that lower demand for Treasuries may be an indication that resources (i.e., money, in case you don't understand the concept that "resources" = money) are flowing from bonds to equities.