Thirty-Year Bond Auction Attracts Below Average Demand

(RTTNews) - Finishing off this week's series of long-term securities auctions, the Treasury Department sold $16 billion worth of thirty-year bonds on Thursday, attracting well below average demand.

The thirty-year bond auction drew a high yield of 3.810 percent and a bid-to-cover ratio of 2.16.

Last month, the Treasury sold $13 billion worth of thirty-year bonds, drawing a high yield of 3.758 percent and a bid-to-cover ratio of 2.64.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.48.

Peter Boockvar, chief market analyst at the Lindsey Group, said, "In contrast to the decent but uneventful 10-year note auction yesterday, today's 30-year bond auction was poor."

"As this part of the curve is usually driven by pension funds and insurance companies (and the Fed) I don't want to draw too much of a conclusion as yesterday's 10-year auction was ok but we'll watch more closely to what this may or may not mean again in the battle between the market and the Fed," he added.

Today's thirty-year bond auction comes after the Treasury sold $30 billion worth of three-year notes on Tuesday and $24 billion worth of ten-year notes on Wednesday.