Part 2/10:
The auction held Thursday prior to the payroll report was characterized by a staggering demand that left analysts and market watchers in awe. Bidding for the 8-week bills saw an uptick that was historically significant, particularly given that such moments of interest are often deemed mundane. In fact, Treasury bills are traditionally viewed as low-risk and boring investments, yet recent market dynamics have entrusted them with a different significance.
Historically, similar spikes were observed before significant economic reports, as was the case last month before the October payroll data was released. Current market behavior hints at a growing unease related to economic stability, as evidenced by elevated repo fails and primary dealer holdings of U.S. Treasuries.