The bond market had a quieter day despite the $29bn 7yr auction. Average yield was awarded at 2.16% with a bid/cover ratio of 2.34 versus the usual average at 2.46. A tighter range was seen across the curve with 5s at the pivot of weakness. The 2yr note fell 2bp (0.21%) 5s were unchanged at 1.80% with further weakness for 10s and bonds (30s) both declining by 1bp (closing 2.30% and 3.04% respectively). Bear flattening could well be the theme for 2016…
Gold saw some renewed selling into year-end, lost $9, and was last seen at $1059 (-0.80%). Silver also traded heavy (down 0.7%) at $13.83. A closing for gold tomorrow BELOW 1044 will warn this may get very ugly next year. Silver is much weaker and a simple closing beneath 14.75 will also warn that new lows are likely in 2016.
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