U.S. Treasury Will Attempt to Sell $75 Billion in Debt This Week
August 11th, 2009We learned how this works last week.
Via: Financial Times:
US bond investors are braced for a testing week, dominated by record $75bn in debt sales by the US Treasury and the Federal Reserve’s policy meeting, which concludes on Wednesday.
Treasury yields have been rising and are back at levels last seen in early June, with the yield on 10-year notes trading at 3.84 per cent on Monday.
Traders would not be surprised to see the benchmark test 4 per cent ahead of a $23bn auction on Wednesday.
The sale will be held about an hour before the Fed’s meeting finishes, which could result in lacklustre demand for the new notes.
David Ader, head of government bond strategy at CRT, said his research and trading house was “leaning” towards a bearish view of the Treasuries market with a test of 4 per cent yield level for the 10-year note.
“The trading environment is not very liquid, volumes are low and the risk appetite of dealers is also limited,” he said.
Traders face the auction of $37bn in three-year notes on Tuesday and $15bn of 30-year bonds complete this week’s debt sales on Thursday.
