Treasuries Fall After Weaker-Than-Average Demand at Bond Sale

Treasuries declined, with 30 year bonds falling the most in two weeks after the government’s $12 billion auction of the debt drew weaker- than-average demand.

The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.37, compared with 2.92 at the September auction and an average of 2.42 at the last 10 auctions. The 30-year bond yield touched 3.89 percent on Oct. 2, the lowest level since April.

“The auction was very tepid,” said Tom di Galoma, head of fixed-income rates trading at Guggenheim Capital Markets LLC, a New-York based brokerage for institutional investors. “The auction shows that the market can sell off when levels are overpriced. This can be a disappointment in these reopened issues.” (more)