The end-of-year window dressing thesis rationalizing the repeatedly 0-yielding bill auctions in 2009 has been amply refuted in 2010 auctions. This trend continued today, as $9.8B of four-weekers were auctioned at a high rate of 0.005%. Only 2.86% was allotted at this high and the median yield was 0.000%.
Primary dealers once again bid aggressively, tendering $46.4B for 0bps of yield, while indirects showed little demand with a 1.29x bid-to-cover.
This after PDs tendered $47.5B in another $10B 4-wk bill auction on the 12th, which had a high rate of 0.000%.