By Cordell Eddings and Susanne Walker
WASHINGTON - Treasury notes remained higher after the U.S. sale of $24 billion in 10-year notes drew a record low auction yield.
The securities were sold at a yield of 1.855 percent, compared with a forecast of 1.853 percent in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers.
The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.90, compared with an average of 3.11 for the previous 10 sales.
Treasuries yields fell earlier below 1.8 percent for the first time since February as Greek politicians struggled to form a government, adding to concern that Europe’s financial turmoil is deepening.
“Any concerns about relative value and things like that are taking a back seat to the larger risk-off issue as investors just want safety, despite the rich levels,” Michael Cloherty, head of U.S. interest-rate strategist at Royal Bank of Canada’s RBC Capital Markets unit in New York, one of the primary dealers obligated to bid at the auctions, said before the sale.
The yield on the current 10-year note fell one basis points, or 0.01 percentage point, to 1.83 percent, at 1:04 p.m. in New York, according to Bloomberg Bond Trader prices.