Pressure has again built upon the GC repo rate and so the primary dealer data become more important. There are a couple of important themes to point out:
1) Dealers are building Tsy net longs again.
2) Dealers have built the largest net longs in currents since the inception of this dataset in 2015 – perhaps finding the auction purchases more difficult to shift to end clients.
Firstly, the net position build chart, which shows another 13bn increase in longs to 240.7bn.
Primary Dealers Net Tsy Positions
Interestingly, there was a 21.5bn build up in net longs in the benchmarks and this is, in part, to the 3/10/30y auctions that settled in the week of the data but every maturity saw a build and even given the 3/10/30 auctions the build of of longs in these maturities is larger than usual. This hints and dealers struggling to off-load the paper from the Treasury.
See the charts