Treasurys edge lower despite good 7-year auction
NEW YORK — Treasury prices edged lower in relatively quiet trading despite another strong showing of demand at the latest auction for government debt.
The government auctioned off $28 billion in seven-year notes Thursday, which the government only recently began selling again.
“People are weary of selling aggressively to get better rates until demand at auctions wane,” said Jim Vogel, a debt analyst at FTN Financial.
The bid-to-cover ratio, a measure of demand, for Thursday’s auction was 2.74 percent, compared with a ratio of 2.63 percent during an auction of similar notes last month.
The price of the seven-year note fell 7/32 to 100 28/32, while its yield rose to 3.11 percent from 3.07 percent.
The seven-year note was reintroduced as the government ramps up spending on economic and financial stimulus programs.
Traders had been buying up stocks and selling off bonds amid new signs the economy was rebounding. But, as stocks have flat-lined during the week, so have Treasurys.
The benchmark 10-year note fell 8/32 to 101 9/32 and its yield rose to 3.47 percent from 3.44 percent late Wednesday.
Vogel said there haven’t been any developments recently that would drive the yield of the 10-year note out of a general trading range of 3.45 percent to 3.65 percent.
In other trading, the 30-year bond fell 17/32 to 104 17/32, and its yield rose to 4.23 percent from 4.20 percent.
The yield of the two-year note was flat at 1.06 percent.
The five-year note fell 2/32 to 99 14/32 a day after the government auctioned off $39 billion of the notes. Its yield rose to 2.50 percent from 2.48 percent.
The yield on the three-month T-bill rose to 0.15 percent from 0.14 percent.
The cost of borrowing between banks fell. The British Bankers’ Association said the rate on three-month loans in dollars — the London Interbank Offered Rate, or Libor — fell to 0.36 percent from 0.37 percent.
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