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.”