“With the FOMC and BOJ announcements coming up later this week, we get the sense that investors are firmly in ‘wait-and-see’ mode,”’ said Thomas Simons, senior money-market economist in New York at Jefferies LLC, one of the 23 primary dealers.
The benchmark U.S. 10-year yield fell one basis point, or 0.01 percentage point, to 1.56 percent as of 5 p.m. in New York, according to Bloomberg Bond Trader data. The 1.625 percent security due in May 2026 was at 100 18/32. Ten-year yields set a record low of 1.318 percent on July 6.
The U.S. has company in facing waning investor interest with
yields close to record lows.
Demand at Australia’s bond sales this year has sunk to the lowest
since 2002, while an auction this month of German five-year
securities had the weakest bid-to-cover since 2011.
The Treasury will wrap up the week’s fixed-rate coupon auctions with Thursday’s sale of $28 billion in seven-year notes, which should lure more buyers, said Gennadiy Goldberg, an interest-rate strategist in New York at TD Securities (USA) LLC, another primary dealer.
“Given our expectation that the Fed will stop short of signaling an impending rate hike, as well as month-end duration extension needs, investors could feel more comfortable buying longer durations at auction on Thursday,” Goldberg said.