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Treasury prices slip as new supply hits market

AP News
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Posted: Mar 08, 2011 5:17 PM
Treasury prices slip as new supply hits market

Treasury prices slipped Tuesday as traders prepared for a new supply of government bonds to hit the market.

The 10-year note dropped 21.8 cents for every $100 invested. The lower price raised the yield to 3.54 percent from 3.51 percent the day before.

The Treasury Department will auction $21 billion in 10-year notes Wednesday. Banks and other lenders use the yield on the 10-year note to help set borrowing rates for mortgages and a wide variety of other loans.

In the first of three auctions this week, the government sold $32 billion of three-year notes on Tuesday at a yield of 1.29 percent. Investor placed bids for 3.22 the amount offered, a stronger show of demand than the 3.06 average over the last four auctions.

The Treasury's three auctions this week should raise $66 billion to help finance the government's budget deficit.

In other trading, the 30-year fell 56.2 cents. That slight drop in price raised its yield to 4.66 percent from 4.63 percent late Monday. The two-year yield edged up to 0.72 percent from 0.70 percent.

In the market for short-term Treasury bills, the three-month T-bill paid a 0.10 yield. Its discount was 0.11 percent.