US 30-Year Treasury Bond Auction Concludes... Demand Confirmation Remains 'Questionable'

Interest Rate 2.295%‥Bid-to-Cover Ratio 2.28 Times

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. 30-year Treasury bond auction concluded relatively smoothly. Although sufficient demand to dispel concerns was not confirmed, the Treasury market appears to be stabilizing.

[Image source=Reuters Yonhap News]

On the 11th (local time), the U.S. Treasury auctioned $24 billion worth of 30-year Treasury bonds at an interest rate of 2.295%. The bid-to-cover ratio stood at 2.28 times, which was lower than average. It is reported that demand from foreign investors was weak.

The U.S. Treasury conducted auctions for 3-year, 10-year, and 30-year bonds consecutively this week. Although the sharp drop in the bid-to-cover ratio seen in the 7-year bond auction in February, which caused Treasury yields to surge, did not occur, there remain doubts about whether there is sufficient demand for Treasury purchases.

Regarding the auction results of the day, Kim Rupert, head of bonds at Action Economist, commented, "It was not a disastrous outcome, but it did not instill a perception that demand for Treasuries is sufficient."

This means concerns that interest rates could soar when issuing Treasury bonds to finance the $1.9 trillion U.S. economic stimulus package have not been completely alleviated.

Meanwhile, after the Treasury auction ended on the same day, the 10-year Treasury yield remained at 1.52%, unchanged from the previous day.

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