T-Note Sale Goes as Expected
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NEW YORK — The U.S. Treasury sold $12 billion worth of 10-year notes Wednesday in the second leg of its quarterly “refunding” auction, and the sale went about as expected.
The average annualized yield on the notes was 7.54%, down from 7.96% at the previous 10-year note auction on Nov. 9, and the lowest since the 7.33% yield on notes that were sold Aug. 10.
The Treasury received bids totaling $28.02 billion and accepted $12.04 billion, including $692 million in non-competitive offers, up from $623 million at the Nov. 9 auction. Non-competitive offers, which agree to accept the average yield, are generally submitted by individual investors.
Traders were happy with the level of demand. Weak demand for the 10-year notes could have triggered a bond market selloff in advance of the Treasury’s sale of $11 billion in 30-year bonds today--the final component of the total $40 billion in new government securities being auctioned this week.
The sale began with three-year T-notes on Tuesday. Individual investors were particularly hungry for those notes, submitting $1.57 billion in non-competitive offers.
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