Thirty-Year Bond Auction Attracts Strong Demand

(RTTNews) - Finishing off this week's series of long-term securities auctions, the Treasury Department sold $13 billion worth of thirty-year bonds on Thursday, attracting strong demand.

The thirty-year bond auction drew a high yield of 3.444 percent and a bid-to-cover ratio of 2.69.

Last month, the Treasury sold $16 billion worth of thirty-year bonds, drawing a high yield of 3.44 percent and a bid-to-cover ratio of 2.09.

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 2.35.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, pension funds and insurance companies are typically the main players this far out on the curve and today's auction was excellent as buyers took advantage of one month highs in yields."

"Any concern with higher inflation was not reflected here ahead of the PPI tomorrow and CPI next week, and the solid auction has led to a further rally across the curve," he added.

Today's thirty-year bond auction came after the Treasury sold $28 billion worth of three-year notes on Tuesday and $21 billion worth of ten-year notes on Wednesday.