Dealers Allotted Historic Low in Stellar U.S. 30-Year Bond Sale
(Bloomberg) -- Dealers were awarded their lowest-ever share of Thursday’s U.S. 30-year bond auction -- just 13.1% -- as investor demand surged, spurring a run-up in prices after the sale that pushed long-end yields to session lows and sharply flattened the curve.
The low dealer allotment resulted from a jump in demand from indirect bidders, the category of Treasury auction participants that includes foreign central banks placing bids through the Federal Reserve Bank of New York. They were awarded 69.7% of the $24 billion auction, well above the recent average.
The auction drew 1.91%, almost 2 basis points lower than the bonds’ yield in pre-auction trading at the 1 p.m. New York time, the bidding deadline. That’s a sign that demand exceeded dealers’ expectations.
The yield on existing 30-year bonds subsequently fell as much as 6.5 basis points to 1.89%, the lowest level this week.
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