NEW YORK: US Treasuries were steady on Wednesday before the Treasury was due to sell $23 billion in 10-year notes, the second sale of $62 billion in new coupon-bearing debt this week.
The government saw strong demand for a $24 billion auction of three-year notes on Tuesday, even amid heavy corporate debt supply.
"We're looking at supply both in corporate land and in Treasuries," said Justin Lederer, interest rate strategist at Cantor Fitzgerald in New York. "Yesterday went very well ... today's auction should be decently received."
Supply was in focus with no major economic releases due until Friday's retail sales report for April.
Benchmark 10-year notes were unchanged on the day to yield 1.76 percent. Investors expect the new notes to price at yields of around 1.75 percent, according to trading in the "when issued" market.
The US will also sell $15 billion in 30-year bonds on Thursday.
US bond yields have fallen this month on concerns about slow global growth and tepid inflation.
Investors have also downgraded expectations the Federal Reserve will raise interest rates at its June meeting, after jobs gains in April were weaker than expected.
"You have to be really hard-pressed to believe the Fed is going in June, it's looking more like September," said Lederer.
Strength in European sovereign bonds has supported US bonds. Treasuries are also considered attractive as they pay far higher yields than comparable European and Japanese debt.
German 10-year notes have rallied from 0.31 percent on April 27 to yield only 0.13 percent.
US yields have fallen from 1.94 percent on April 26, but are above the one-month low of 1.71 percent set on Friday following the disappointing US jobs report for April.
Comments
Comments are closed for this article.