U.S. Treasuries Rally after Strong Foreign Demand in Auction

Treasury five-year notes gained for a fourth day, the longest rally since August, as a $35 billion auction of the securities received the most demand in a decade from a group of bidders that includes foreign central banks.

Indirect bidders bought 65 percent of the notes, the most since December 2004, with U.S. yields the highest among Group of Seven nations. The securities were sold at a yield of 1.595 percent. The average five-year yield of G-7 nations today excluding the U.S. was 0.704 percent. Japan had the lowest at 0.111 percent, followed by Germany, 0.112 percent.

“The ongoing strength of the dollar and the low-global-yield landscape outside of the U.S. makes five-year Treasuries yielding over 1.50 percent attractive to foreign investors as we go into month-end,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “This is not a Federal Reserve story. It’s an issue of U.S. Treasuries looking attractive versus the global alternatives.”

Bloomberg

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.