3-year-note auction attracts buyers
The yield is the highest since September, but demand is strong. A $21 billion auction of 10-year notes comes Wednesday.
But more difficult auctions -- of 10-year notes and 30-year bonds -- are still to come.
Better, the bid-to-cover ratio, a key measure of investor demand, was a healthy 3.1-to-1. So, for every dollar of notes sold, there were $3.10 in bids. Indirect bidders, mostly central banks, bought 52% of the issue.
The results cheered the bond market. Yields fel, and prices, which move in the opposite direction as yields, moved up. The publicly traded 3-year note yield was down to 1.718% from 1.743% on Monday.
The 10-year Treasury was yielding 3.968%, down from Monday's 3.994%. The yield briefly moved over 4% on Monday for the first time since June.
The iShares Barclays 7-10 year Treasury (IEF) exchange-traded fund was up 0.2% to $88.44.
A $21 billion issue of 10-years will be sold on Wednesday. This will be closely watched because the 10-year note is the foundation on which mortgage rates are built.
A $13 billion offering of 30-year bonds will be sold on Thursday.
The bond market was roiled when auctions of longer-term notes in March generated less-than-expected demand and yields rose as a result.
The fear was that the results were a signal of buyer resistance to the billions of dollars of securities that the Treasury has forced to sell to finance federal government operations.
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[BRIEFING.COM] The S&P 500 settled lower by 0.8% after early strength turned into afternoon weakness.
Today's headline event came in the form of Ben Bernanke's testimony before the Joint Economic Committee. During his remarks, Chairman Bernanke said premature tightening of monetary policy could stall the pace of recovery. This followed weeks of conflicting remarks from FOMC members, which sparked speculation regarding possible changes to the Fed's policy course.
However, ... More
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