Strong 10-Year Treasury Auction Draws Heavy Demand
The Treasury sold $39 billion of 10-year notes at a 5.30% yield, with a bid/cover ratio of 2.77, the highest since 2014. Indirect bidders took 80.3% of the issue and dealers took only 2.5%, both signs of strong demand.
By Karishma Vanjani A wave of investors, especially ones from overseas, showed up at Wednesday's 10-year Treasury note auction. They gobbled up $39 billion worth of notes at their highest yield in more than two decades. Demand was strong. 55 for recent 10-year Treasury auctions.
5% -- and the lowest amount in a 10-year auction since the Financial Crisis, according to BMO Capital Market strategist Vail Hartman. Foreign investors appeared to be active participants at Wednesday's auction. 7%, per Hartman. Official Treasury data has shown an uptick in overseas participation for recent long-duration Treasury auctions.
In September, the group labeled "foreign and international" bought the highest share of 30-year bonds since data tracking began in 2009, with the same group buying a rising share of 10-year notes, as well. 30%, a payout that will be given to investors for the next decade semi-annually. 018 percentage points below the pre-bidding deadline level, which is another sign of strong demand. A brutal meltdown of long-term government bonds had set the stage for the auction.
368% in the morning, a level not seen since 2002. 273%, before rebounding slightly. The 3-year auction on Tuesday was also strong. Attention now turns to Thursday's auction, when $22 billion worth of 30-year bonds are scheduled to be sold.
Wall Street veterans, including Anatole Kaletsky of Gavekal Research and Jim Bianco of Bianco Research, have recently turned optimistic on long bonds after years of shunning them. It appears that they are not alone. com. This content was created by Barron's, which is operated by Dow Jones & Co.
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