Thursday, December 11, 2014

U.S. Treasurys Attract Reasonable Demand as Inflation View Eases

The U.S. Treasury Department’s sale of $59 billion in notes and bonds this week attracted the most demand since June as inflation expectations tumbled and investors sought a refuge amid sagging global growth.

The bid-to-cover ratio, which gauges demand by comparing total bids with the amount offered, was 3.04 for the offerings of three-, 10- and 30-year securities, the highest level on the series in six months, according to Treasury data compiled by Bloomberg. The $13 billion long-bond sale today drew the lowest yield since November 2012 as crude oil fell below $60 a barrel for the first time in five years.

“The long bond is all about inflation and the curve,” said Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York. “There is no near- to intermediate-term concern about inflation because of the weakness of the commodity complex.”

Bloomberg

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