Bids for US 3-year note sale rebound from 7-year low

New York (Aug 9)  Demand at a $24 billion U.S. three-year Treasury note auction rose on Tuesday, rebounding from a seven-year low set in July, Treasury Department data showed.

The latest three-month Treasury supply was the first leg of the government's quarterly refunding, in which it will raise $13.8 billion of new cash and repay $48.2 billion to bondholders.

The ratio of bids to the three-year notes offered was 2.98, up from 2.69 at the prior three-year note sale last month. This gauge on auction demand was also the highest since December.
 
Fund managers, foreign central banks and other indirect bidders bought 56.85 percent of the latest three-year Treasury issue, the most since May. They purchased 44.75 percent in July, which was the least since February.

Small bond dealers and other direct bidders bought 9.47 percent, which was their smallest share since March. They purchased 15.83 percent last month, the most since December 2015.
 
Primary dealers, or the top 23 Wall Street firms that do business directly with the Federal Reserve, bought 33.68 percent, down from July's 39.42 percent and their smallest share since May.
 
The Treasury Department sold the latest three-year issue at a yield of 0.850 percent, up from 0.765 percent in July, which was the lowest at a three-year auction since February 2014.

The Treasury will sell $23 billion of 10-year notes on Wednesday and $15 billion of 30-year bonds on Thursday.

Source: Reuters