U.S. Treasurys Extend Gains

Bond prices extend gains on Tuesday following the U.S. Treasury Department’s auction of two-year notes.  The Treasury Department auctioned $26 billion in two-year notes at a high yield of 0.603 percent, its highest since March 2011. The bid-to-cover ratio, an indicator of demand, was 3.45.

U.S. 30-year bonds gained more than 1 point as yields fell to more than one-week lows to 2.58 percent, from a yield of 2.65 percent late on Monday. Also, 10-year note yields fell to near two-week lows to 1.97 percent, from 2.06 percent late Monday.

The share of indirect bidder purchase was 48.20 percent, smaller than on January’s 48.65 percent. The share of direct bidders was 13.30 percent, up from January’s 8.76 percent.  Earlier, U.S. Treasurys prices edged higher, erasing early losses after testimony from Federal Reserve Chair Janet Yellen kept the door open for a later than mid-year interest rate hike and U.S. economic data was weaker than expected.


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