Treasuries pared losses as the sale of $32 billion in three-year securities drew the lowest yield since records began in May 1981 in the first note sale after Standard & Poor’s cut the U.S. credit rating.
The notes drew a yield of 0.50 percent, compared with the average forecast of 0.523 percent in a Bloomberg News survey of seven of the Federal Reserve’s primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 3.29, compared with an average of 3.15 for the past 10 sales. The Federal Reserve is scheduled to issue a policy statement at 2:15 p.m. New York time.
Full story: Strong Treasuries Demand in Post-Downgrade Sale – Bloomberg.