The Daily Item, Sunbury, PA

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November 27, 2013

Treasuries fall as 7-year demand lowest since 2009 on Fed views/

(Continued)

Indirect bidders, an investor class that includes foreign central banks, purchased 34.1 percent of the notes, compared with an average of 40.7 percent for the past 10 sales.

Direct bidders, non-primary dealer investors that place their bids directly with the Treasury, purchased 16.1 percent of the notes, compared with an average of 19.4 percent at the last 10 auctions.

Investors bid $2.86 for each dollar of the $1.964 trillion in U.S. government notes and bonds sold at auction this year, according to Treasury data compiled by Bloomberg. That's down from the record $3.15 for the $2.153 trillion sold at last year's offerings.

The $179 billion of debt sold in October attracted an average bid-to-cover of 2.85, the third consecutive monthly increase and the highest demand since May.

Seven-year notes have lost 2.7 percent this year, versus a drop of 2.2 percent for Treasuries overall, according to Bank of America Merrill Lynch indexes. The seven-year securities returned 3.9 percent in 2012, while Treasuries overall gained 2.2 percent.

Wednesday's offering was the last of three note auctions this week totaling $96 billion. The government sold $32 billion in two-year debt on Nov. 25 and $35 billion in five-year securities Tuesday. This week's sales will redeem $64.4 billion of maturing securities while raising $31.6 billion in new cash.

The Thomson Reuters/University of Michigan final index of consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier. The median forecast of 65 economists surveyed by Bloomberg called for 73.1 after a preliminary reading of 72.

The MNI Chicago Report business barometer fell to 63 in November, compared with a median forecast for 60 in a Bloomberg News survey, from 65.9 a month earlier. Results above 50 signal expansion. The Conference Board index of leading economic indicators unexpectedly rose 0.2 percent, compared with a median forecast for no change in a Bloomberg News survey.

Recent data has showed signs of economic strength, as retail sales last month rose 0.4 percent versus forecast for a 0.1 percent gain, and as nonfarm payrolls expanded by 204,000 jobs in October, more than the 120,000 forecast in a Bloomberg News survey.

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