Treasuries remained higher as the government’s $35 billion sale of five-year notes drew the lowest yield since the government began quarterly sales of the securities in 1976.
The auction drew a yield of 1.260 percent, compared with the 1.276 percent average forecast in a Bloomberg News survey of 8 of the Federal Reserve’s 18 primary dealers. Treasuries rose earlier after a drop in U.S. consumer confidence spurred speculation that the Fed will increase purchases of U.S. debt to boost the economy.
“It’s a fairly receptive environment for Treasury securities,” Christopher Sullivan, who oversees $1.6 billion as chief investment officer at United Nations Federal Credit Union in New York, said before the auction. “We have intimations that the Federal Reserve will reinstate quantitative easing. We’ll have a very slow, moderate, below-trend expansion for a fair amount of time.”
Current five-year note yields slid 6 basis points, or 0.06 percentage point, to 1.23 percent at 1:07 p.m. in New York, according to BGCantor Market Data. The 10-year note yield dropped 7 basis points to 2.46 percent.
The sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.96, compared with an average of 2.74 at the past 10 auctions.
Indirect bidders, an investor class that includes foreign central banks, purchased 50.1 percent of the notes, compared with 50.8 percent at the last auction on Aug. 25 and an average of 46 percent at the past 10 sales. Five-year notes drew a then record-low yield of 1.374 percent at last month’s auction.
Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, bought 8.7 percent, matching the share in August.
The size of the five-year offering today was the smallest since May 2009. The Treasury will auction $29 billion in seven- year debt tomorrow, after selling $36 billion in two-year securities yesterday.
To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
http://jodnet.blogspot.com
The auction drew a yield of 1.260 percent, compared with the 1.276 percent average forecast in a Bloomberg News survey of 8 of the Federal Reserve’s 18 primary dealers. Treasuries rose earlier after a drop in U.S. consumer confidence spurred speculation that the Fed will increase purchases of U.S. debt to boost the economy.
“It’s a fairly receptive environment for Treasury securities,” Christopher Sullivan, who oversees $1.6 billion as chief investment officer at United Nations Federal Credit Union in New York, said before the auction. “We have intimations that the Federal Reserve will reinstate quantitative easing. We’ll have a very slow, moderate, below-trend expansion for a fair amount of time.”
Current five-year note yields slid 6 basis points, or 0.06 percentage point, to 1.23 percent at 1:07 p.m. in New York, according to BGCantor Market Data. The 10-year note yield dropped 7 basis points to 2.46 percent.
The sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.96, compared with an average of 2.74 at the past 10 auctions.
Indirect bidders, an investor class that includes foreign central banks, purchased 50.1 percent of the notes, compared with 50.8 percent at the last auction on Aug. 25 and an average of 46 percent at the past 10 sales. Five-year notes drew a then record-low yield of 1.374 percent at last month’s auction.
Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, bought 8.7 percent, matching the share in August.
The size of the five-year offering today was the smallest since May 2009. The Treasury will auction $29 billion in seven- year debt tomorrow, after selling $36 billion in two-year securities yesterday.
To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net
To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net
http://jodnet.blogspot.com
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