Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: TideGlider who wrote (17180)	8/11/2009 2:50:36 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 103300

TREASURIES-Foreign bidders star in strong US 3-year sale Tue Aug 11, 2009 1:45pm EDT reuters.com By John Parry NEW YORK, Aug 11 (Reuters) - A huge bid by foreign investors galvanized demand at a record 3-year U.S. Treasury note auction on Tuesday, alleviating concerns about waning appetite for U.S. government debt as the economy starts to recover. Robust though the note sale was, sales of longer maturity debt later this week may struggle to attract as much demand because of anxiety that the explosion of government debt issuance to pay for financial rescues may ultimately ignite inflation, analysts said. Foreigners, who own about half the U.S. government debt, were big buyers at Tuesday's auction, while the bid-to-cover ratio, an overall gauge of demand, was at 2.89, was strong. Indirect bidders, who include foreign central banks, took about 62 percent of the record $37 billion of 3-year notes sold. "It was a very good auction," said Mary Ann Hurley, senior Treasuries trader in Seattle at brokerage D.A. Davidson. "The bid-to-cover was very good and indirect bidders were a stellar 62 percent: that's great," Hurley said. But analysts cautioned that the three-year sale was an unreliable indicator of how the auctions of longer maturity government bonds and notes will fare later this week. "It is difficult to take the performance of the 3-year auction and map it onto what will happen in the 10s and 30s," said Ian Lyngen, senior government bond strategist with CRT Capital Group in Stamford, Connnecticut. The U.S. government plans to sell $23 billion of 10-year notes on Wednesday and $15 billion of 30-year bonds on Thursday. The benchmark 10-year note sale on Wednesday might not fare as strongly as the 3-year note because it will happen shortly before the Federal Open Market Committee's policy statement in which the U.S. central bank may signal it will let its program to purchase Treasuries expire next month as originally planned. That risk makes it less compelling for bond investors to buy 10-year notes before the Fed announcement, Lyngen said. Analysts also cautioned that longer maturities, which are more susceptible to future inflation expectations, are more likely to sell off as supply of longer-dated debt continues to hit the market. The government is on course to issue about $2 trillion of debt this year alone. "While this auction today is unquestionably good news, it doesn't spell anything for how 10s and 30s will do," Hurley said. "10s and 30s are really more impacted by inflationary expectations," Hurley added. (Reporting by John Parry)