Global funds purchased a record amount of U.S. 10-year Treasury securities.
- A breakdown of the August 11 sales released by the Treasury on Monday revealed that the Foreign and International category was awarded $15.4 billion of the $41 billion of notes sold.
- This week brings about the next wave of Treasury supply across the front-end and belly of the curve, starting with a $60 billion 2-year note sale at 1 pm New York.
- Market participants will be analyzing the results for related patterns of foreign central bank demand, often reflected in the indirect auction allotment.
- The 2-year auction is poised to draw about 0.25%, the highest yield in more than a year, while the 10-year sold at the lowest yield since February.
- The 10-year sales in August also caught traders off guard as the notes were awarded at just 1.34%, more than three basis points below the level of prevailing yields ahead of the auction.
Central banks and official money may be at the forefront again as they often prefer to purchase shorter maturities due to their lower volatility. The new shorter-dated Treasuries that are sold each time have not exhibited the same pattern.
DXY up +0.11%, EUR USD down -0.07%Source: Bloomberg
