Treasuries advanced, erasing earlier losses, after the U.S. sold $28 billion of two-year notes to stronger-than-average demand amid speculation a global economic slowdown will restrain U.S. growth.
The auction’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 3.71, the highest since December, versus an average of 3.36 at the past 10 offerings. The sale was rated five, or outstanding, on a scale of one to five in a Bloomberg survey of Federal Reserve primary dealers. Data tomorrow are forecast to show the U.S. economy grew less in the third quarter than previously estimated.
“The auction was solid,” said Larry Milstein, managing director in New York of government-debt trading at R.W. Pressprich & Co. “All the metrics looked solid. We’re starting to see Treasuries move higher. A lot of it is relative value. Look at Treasuries versus other nations.”