Demand rebounds for U.S. 10-year note supply

NEW YORK : Demand for $ 23 billion of U.S. 10-year Treasury note supply on Wednesday rebounded from July when it hit its weakest level in over seven years, as investors loaded up on this debt issue due to intense global demand for longer-dated bonds, Treasury data showed.The latest 10-year Treasury supply was the second leg of the government’s quarterly refunding, in which it will raise $ 13.8 billion of new cash and repay $ 48.2 billion to bondholders.

The ratio of bids to the amount of 10-year notes offered was 2.43. This compared with 2.33 last month, which was the lowest since March 2009.

Fund managers, foreign central banks and other indirect bidders bought 72.18 percent of the latest 10-year Treasury issue, not far from the record 73.63 percent set in June. They purchased 54.31 percent in July, which was the least since January 2015.

Small bond dealers and other direct bidders bought 7.64 percent, down from 7.94 percent at last month’s 10-year note sale.

Primary dealers, or the top 23 Wall Street firms that do business directly with the Federal Reserve, bought 20.17 percent, less than July’s 37.74 percent which was the most since January 2015.

The Treasury Department sold the latest 10-year issue at a yield of 1.503 percent, which was lower than 1.516 percent in July and the second lowest ever yield at a 10-year note auction.

The Treasury will complete this week’s refunding with a $ 15 billion sale of 30-year bonds on Thursday.