Run-up in Treasury bond yields eases
Finally — a break for beaten-up bond investors.
After soaring in recent days, Treasury bond yields ended flat to lower Thursday after the government’s sale of $13 billion in 30-year bonds attracted strong demand.
The bonds were sold at a yield of 4.41%. Analysts had expected a yield of 4.48%.
“Demand was excessive,” said Tom DiGaloma, a bond trader at Guggenheim Securities.
Foreign buyers in particular were hungry for the bonds: So-called indirect bidders, a category that includes foreigners, bought 49% of the offering, the most for any 30-year deal since July 2009, according to CRT Capital Group.
Foreigners’ interest is important because it suggests that, despite expectations that the federal deficit will remain massive — thanks to the expected extension of the 2001 and 2003 tax cuts — America’s foreign creditors aren’t shying away from funding Uncle Sam.
The yield on the previously issued 30-year bond eased to 4.40% from a six-month high of 4.44% on Wednesday. The 10-year T-note yield slipped to 3.21% from 3.23%.
Market yields on Treasuries and many other bonds have risen sharply over the last month, in part on growing optimism about the economic outlook.
That optimism has helped to lift the stock market since August. On Thursday most broad market indexes continued to edge higher, with the Standard & Poor’s 500 adding 0.4% to 1,233.00, a two-year high. The Nasdaq composite rose 0.3% to 2,616.67, its highest in nearly three years.
