Following yesterday's auction of $32 billion worth of three-year notes, the Treasury Department sold $21 billion worth of ten-year notes on Wednesday, attracting below average demand.
The ten-year note auction drew a high yield of 1.764 percent and a bid-to-cover ratio of 2.85.
The Treasury Department sold $24 billion worth of ten-year notes last month, drawing a high yield of 1.68 percent and a bid-to-cover ratio of 2.49.
The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
Peter Boockvar, managing director at Miller Tabak, said, "While the yield was about in line with the when issued, the bid to cover of 2.85 is below the previous 12 month average of 3.07 and direct and indirect bidders took the 2nd least amount since October 2011."
"With ten-year inflation expectations rising for a 7th straight day to 2.40% today, according to the TIPS market, the highest since March, maybe a yield of just 1.76% just wasn't enough of an enticement as it basically locks in a negative real rate of return," he added.
Finishing off this week's series of long-term securities auction, the Treasury is due to sell $13 billion worth of thirty-year bonds on Thursday.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org