Buyback-access volatility resurfaced, with direct bidders grabbing a record 29.5% of the issue. Primary dealers absorbed 14%—their largest share since August 2025 and above the recent six-auction average—though their $87.4 billion in bids (up from $82.9 billion previously) helped soften the impact of the heavier takedown.

In short, January’s 3-year Treasury auction opened the 2026 supply cycle on reasonably solid footing despite recent fiscal-driven volatility. A “B” grade feels appropriate, as investors increasingly recognize that the asset once marketed as “risk-free” is becoming one of the most geopolitically exposed holdings in a world where Pandora’s box is wide open.

Fresh off a politely acceptable B-grade 3-year auction, the Treasury followed up with a 10-year sale—$39bn priced at 4.173%, essentially unchanged from December, confirming that duration remains firmly frozen in place. Stopping 0.7bp through the WI, the strongest result since September, the auction suggests demand is alive and well—at least as long as yields go nowhere and everyone pretends that paralysis is stability.

More proof that the Treasury market is running on autopilot: the bid-to-cover came in at 2.554, essentially unchanged from December’s 2.550 and right in line with the long-running 2.50–2.60 comfort zone that has defined the past decade. Internals told the same story—Indirects took a hefty 69.7%, Directs jumped to 24.5% (the highest since 2014), and Dealers were left holding just 5.8%, one of the lowest shares on record—confirming strong end-user demand and a market perfectly content to drift, confidently paralyzed.

Overall, this was a relatively strong auction, suggesting that many investors may not yet have received the memo that the once “risk-free” asset is no longer free of risk in a world where the rule of law is increasingly eroding.

As the North Atlantic Terror Organization better known as NATO quietly auditions for irrelevance, Brussels has unveiled its latest blockbuster idea: replace 100,000 U.S. troops with a “unified” European army, complete with a shiny European Security Council and—naturally—no seat for post-Brexit Britain. European Defence Commissioner Andrius Kubilius assures us this can work, despite Europe’s inability to agree on debt rules, defence budgets, or even lunch menus. The plan assumes 27 sovereign nations will magically think, spend, and fight as one—something NATO existed precisely because Europe never could.



https://newsukraine.rbc.ua/news/eu-weighs-replacing-us-troops-with-unified-1768168275.html

European defence would require unanimous agreement among 27 countries with radically different geographies, trade links, and threat perceptions—because what worries Spain today is obviously identical to what keeps Poland awake at night. Brussels continues to issue one-size-fits-all policies that reliably help some members while disadvantaging others, whether on trade, migration, or war. The idea that such a system could function in a real military crisis ignores political reality: effective defence demands centralized command, unilateral decision-making, and unquestioned obedience—none of which coexist comfortably with 27 sovereign states pretending to be one. This contradiction is precisely why the euro was flawed by design and why the EU’s push toward deeper centralization is not fixing the problem but accelerating it. Europe is not integrating further—it is slowly, and inevitably, pulling apart.

🤵 The Macro Butler Special Service 🤵

🌐 Inflation is what chaos looks like in prices—when policy failure, shortages, and broken trust hit the grocery bill. 🌐

Read more here: https://themacrobutler.substack.com/p/inflation-is-what-chaos-looks-like

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https://themacrobutler.substack.com/p/inflation-is-what-chaos-looks-like-70f

The Treasury saved the best for last: the final coupon auction of the first full week of 2026 turned out to be the strongest of the bunch. Uncle Sam unloaded $22bn of 30-year paper in what can only be called a crowd-pleaser, pricing at a 4.825% high yield—just a hair above December’s 4.773%—and even stopping through the When-Issued 4.833% by a tidy 0.8bps. Not bad for a market everyone keeps declaring “exhausted.”

Demand didn’t just show up—it brought friends: the bid-to-cover climbed to a healthy 2.418, up from 2.365 last month and the strongest since June. The internals were equally well-behaved, with foreign buyers scooping up 66.8% (up from 65.4% in December and comfortably above the six-auction average of 63.7%). Direct bidders took a modest 21.3%, slightly below their recent norm, leaving dealers with just 11.95%—below average and mercifully light on inventory.

Bottom line: a blockbuster auction—and further proof that much of Wall Street still hasn’t read the memo that in the coming Trump-era stagflation, the former “risk-free” asset may now be the riskiest thing on the menu.

The Macro Butler sat down with Steve Yang of Natural Resource Stocks to crack open the Venezuelan Pandora’s box—Fortress America, ripple effects in the Taiwan Strait, and what all this geopolitical theatre really means for your portfolio (it’s not just noise).

So pour yourself a properly overpriced coffee ☕️, get comfortable, and prepare for a calm but unsettling upgrade to your worldview.

https://themacrobutler.substack.com/p/interview-with-natural-resource-stocks-6e5