'Awesome demand' for 7-year Treasury auction amid Fed bond-buying
Strong bidding was seen in the sale for $32 billion of 7-year Treasury notes, the last of three coupon-bearing debt auctions this week. The auction stopped through by three basis points, a sign of "awesome demand," according to Tom di Galoma, managing director of Treasurys trading at Seaport Global Securities. A stop-through indicates by how much the highest yield the Treasurys sold in the auction is below the highest yield expected when the auction began - the "when issued" level. The results helped to push bond yields lower, with the 10-year Treasury note rate falling 5.8 basis points to 0.798% and the 7-year note yield slumping 6.8 basis points to 0.673%. Bond prices move in the opposite direction of yields. Analysts have pointed to a combination of reasons for the bullish trading in government paper, including the Federal Reserve's open-ended bond purchases, heightened concerns about the COVID-19 outbreak and expectations for a recession this year. U.S. government bonds are traditionally considered a safe haven.
-Sunny Oh; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
March 26, 2020 13:23 ET (17:23 GMT)
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