The government conducted a sale of $39 billion of notes, the largest auction of 5-year note auction ever.
From Susanne Walker and Daniel Kruger Bloomberg:
July 29 (Bloomberg) -- Treasury notes fell after a government auction of a record amount of notes drew higher-than- forecast yields for a second consecutive day, renewing concern a deluge of U.S. debt will overwhelm investor demand.
The $39 billion in five-year notes yielded 2.689 percent, more than 2.635 percent median forecast of eight primary dealers surveyed by Bloomberg News. Investors also demanded higher yields on yesterday’s $42 billion of two-year notes. Demand from an investor class that includes foreign central banks declined at each of the auctions from last month, when those sales attracted the most interest in at least six years.
“You’re starting to see customers pull back from the market,” said Thomas L. di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC, a New-York based brokerage for institutional investors. “It’s been a fundamental shift in central bank buying.”
