Treasurys slip on weak demand for 30-year bonds

AP News
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Posted: Jun 09, 2011 5:29 PM
Treasurys slip on weak demand for 30-year bonds

Bond prices slipped Thursday after the third auction of Treasury debt this week didn't go as well as the first two.

Demand was somewhat weak for 30-year bonds at the auction. That followed two much stronger auctions for three-year notes and 10-year notes on Tuesday and Wednesday.

The government sold $13 billion worth of 30-year bonds at a yield of 4.24 percent.

A measure of demand was below the average for the previous six auctions. There were 2.63 bids submitted for each one that was accepted. That "bid-to-cover" ratio was below the average of 2.69 for the past six auctions for 30-year bonds.

Analysts at Nomura said in a note to clients that the Treasury market was showing signs of "supply indigestion" following the two strong auctions earlier in the week.

The yield on 30-year bonds already in circulation rose to 4.22 percent from 4.19 percent late Wednesday. The price on the bond fell 84.4 cents for every $100 invested. Bond yields rise when their prices fall.

In other trading, the yield on the benchmark 10-year Treasury note rose to 2.99 percent from 2.94 percent. Its price fell 46.9 cents for every $100 invested. The yield on the 2-year note rose to 0.42 percent from 0.38 percent.

The yield on the three-month T-bill was unchanged at 0.03 percent. Its discount was 0.04 percent.