BLBG: Treasuries Advance After $25 Billion Auction of 3-Year Notes
By Sandra Hernandez
Nov. 10 (Bloomberg) -- Treasuries gained after an auction of $25 billion in three-year notes drew stronger-than-expected demand after the first sale of the notes in 18 months.
The three-year notes yielded 1.8 percent, below the average forecast of 1.867 percent of six bond-trading firms surveyed by Bloomberg News. Indirect bidders, a class of investors that includes foreign central banks, bought 36.1 percent of the securities offered, the most since May 2005, when they purchased 40.3 percent.
``It was pretty obviously a very strong auction,'' said Michael Pond, an interest-rate strategist in New York at Barclays Capital Inc., one of the 17 primary government securities dealers required to bid at Treasury sales. ``It indicates that strong demand remains for short-end Treasuries and the Treasury's not yet being penalized for increasing supply significantly.''
Benchmark two-year note yields fell 4 basis points, or 0.04 percentage point, to 1.29 percent at 11:47 a.m. in New York, according to BGCantor Market Data. The 1.5 percent security maturing in October 2010 rose 2/32, or 63 cents per $1,000 face amount, to 100 13/32.
Yields on the benchmark 10-year note fell 2 basis points to 3.77 percent.
To contact the reporter on this story: Sandra Hernandez in New York at shernandez4@bloomberg.net
