EE Treasury returns. United States They fell earlier Wednesday before the first sale of 20-year bonds since 1986.
What do treasures do?
The yield on 10-year treasury bills
TMUBMUSD10Y,
fell 1.6 basis points to 0.695%, while the 2-year rate
TMUBMUSD02Y,
It was almost flat at 0.171%. Bond yields at 30 years.
TMUBMUSD30Y,
It fell 2.2 basis points to 1,414%.
What motivates Treasurys?
As part of the Department of the Treasury’s strategy to end its multi-billion dollar deficits this year, it will sell $ 20 billion of 20-year bonds in the afternoon. The new debt issue could weigh on the government’s paper market, as brokers may seek to increase yields to attract enough interest in the auction.
Analysts believe there should be strong demand for bonds between 10 and 30 year maturities among insurance companies, pension funds and other institutional investors who need to match long-term liabilities with long-term assets also.
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Market participants also point out that the 20-year bond could help improve the liquidity of older long-term treasury bills, a problem that has persisted since mid-March, when trading in these so-called unofficial securities ‘is stopped completely.
In other markets, the UK made its first bond sale which posted a negative return on Wednesday. According to the Debt Management Office, it auctioned 3.75 billion pounds ($ 4.60 billion) in 3-year bonds at an average rate of -0.003%.
Investors will attend the launch of the Federal Reserve minutes at 2 p.m. AND. The report could show how senior Fed officials think of their emergency loans used to boost the flow of credit.
Boston Fed Chairman Eric Rosengren said in an interview with MarketWatch that there is little that the central bank can do to address the public health crisis plaguing the United States.
What did market players say?
“At 20, we think there will be strong demand, because its reintroduction is in an attractive position on the curve for certain investors (in particular life and retirement insurance) as well as a lack of supply in this sector, “said Justin Lederer. . , Treasury market analyst at Cantor Fitzgerald, in a note.
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