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] Range-bound action continues with the S&P 500 (-0.1%) holding near its unchanged level. Meanwhile, the tech-heavy Nasdaq (+0.2%) outperforms.
The Nasdaq has been able to stay ahead of the S&P 500 throughout the session thanks to the relative strength of the technology sector (+0.1%). High-beta chipmakers also outperform, but the PHLX Semiconductor Index has narrowed its gain to 0.1% after being up 0.7% shortly after the start of the session.
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