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 major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.
Market participants went into today's session expecting to hear some new insight from Fed Chair Janet Yellen, who delivered the keynote address at this year's Jackson Hole Symposium. Unfortunately, the ... More
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