The US will pay a paltry 1.029% to borrow $35 billion for 5-years. Deficits aren’t much of a worry when you can be funded for nearly nothing. Meanwhile, Greek two-year yields just hit an astronomical 44% on worries the Sept tranche of bailout funds could be delayed because of Finland’s collateral negotiations.
The auction came in at a record low rate but right where the market was expecting. Earlier in the day it looked as though the yield would come in below 1% but demand for safety is falling even with stocks drifting lower. The results should push up US rates, which will underpin USD against JPY for the remainder of the session.