U.S. Treasury Prices Rally on Weak Equities

U.S. Treasury yields fell on Tuesday after the U.S. government’s auction of 3-year Treasury notes, the first of three debt auctions this week.  The Treasury Department auctioned $27 billion in three-year notes at a high yield of 0.992 percent, the highest since May 2011. The bid-to-cover ratio, an indicator of demand, was 3.38.

In the “when issued” market, traders had expected the issue due July 2017 fetch a yield of 0.996 percent.  Indirect bidders, which include major central banks, were awarded 38.2 percent of the supply, their largest share since February.  Three-year Treasury notes rose 3/32 in price to yield 0.943 percent after the announcement.

The yield on benchmark 10-year Treasury notes—used to calculate mortgage rates and other consumer loans—last stood at 2.56 percent, down from 2.62 on Monday. The 30-year bond, meanwhile, was up 1 6/32 in price to yield 3.38 percent, down from yesterday’s 3.44 percent.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.