Source: Wall Street News
The bid interest rate for this 30-year US Treasury auction was 4.229%, the lowest since August last year. The last auction in December was 4.344%. The pre-issue interest rate was 4.230%, higher than the final 4.229%, which did not reflect weak demand. However, the torrent of new US bond issuances is about to begin, and investors still need to be wary.
On Thursday, the US Treasury auctioned off $21 billion of 30-year Treasury bonds. This is the first ultra-long-term US bond auction since 2024. Overall, the auction results are steady, and overseas demand is strong.
The bid interest rate for this 30-year US Treasury auction was 4.229%, the lowest since August last year. The last auction on December 12 was 4.344%. The pre-issue interest rate was 4.230%, higher than the final 4.229%, which did not reflect weak demand as a final spread.
The bid interest rate on 30-year US bonds has continued to fall since October last year. On October 12 of last year, the bid interest rate for 30-year US bonds was 4.837%, approaching 5.059% on August 9, 2007, 5.08% on August 10, 2006, and 5.520% on August 9, 2001.
In terms of the bid multiplier, this time it is 2.37. Although it is lower than the previous 2.43, it is close to the average of the last six times of 2.39.
As an indicator of domestic demand in the US, direct bidders (Direct Bidders), including hedge funds, pension funds, mutual funds, insurance companies, banks, government agencies, and individuals, were allocated 17.7%.
As an indicator for measuring overseas demand, indirect bidders (Indirect Bidders) that participate in bidding by foreign central banks and other institutions are usually allocated 67.8%, indicating a rise in overseas demand.
As the “successors” that undertook all unpurchased supplies, the share of primary dealers (Primary Dealers) in this round was 14.5%, the lowest since August last year, confirming that real demand is steady.
After the US bond auction results were released, the 30-year US bond yield slightly rebounded in the short term to below 4.22%. After the US CPI data was released earlier on Thursday, the 30-year US Treasury yield rebounded from 4.1546% to a daily high of 4.2456%.
Although this US bond auction is steady, looking ahead to the whole of this year, it is still worth being wary of, because the flood of new US bonds is about to begin, and the Biden administration is expected to boost the economy by issuing large amounts of debt before the US presidential election. This week's article on the Wall Street News website warns that in the next few weeks, the US, UK, and Eurozone governments will begin putting bonds into the market at an unprecedented rate.
editor/tolk