Saturday, August 1, 2009
Prices rise after a record weekly debt offering goes down with only mild indigestion. Investors brace for next week’s refunding announcement.
Treasury prices rose Friday after a record week of debt sales ended on a high note, easing some fears that foreign demand for U.S. debt is wearing thin.
The government sold more than $200 billion in notes, bills and Treasury Inflation Protected Securities this week. It was the latest in a string of record-setting debt offerings that the U.S. has held monthly as the government seeks to fund a $1.8 trillion budget deficit.
Concerns about buyer fatigue were highlighted after this week’s auctions of 2- and 5-year notes brought in fewer bids compared with last month’s auctions of the securities. Indirect bids, which include foreign central banks, were also mixed this week.
Foreign demand: Many analysts are concerned that China and other Asian central banks, which are major buyers of U.S. debt, are losing their appetite for Treasurys. But those concerns were allayed after Thursday’s auction of 7-year notes garnered a healthy share of indirect bidders.