Thirty-Year Bond Auction Attracts Strong Demand

(RTTNews) - The Treasury Department sold $16 billion worth of thirty-year bonds on Thursday, finishing off this week's series of long-term securities auctions by attracting strong demand.

The thirty-year bond auction drew a high yield of 3.224 percent and a bid-to-cover ratio of 2.60.

Last month, the Treasury sold $13 billion worth of thirty-year bonds, drawing a high yield of 3.369 percent and a bid-to-cover ratio of 2.40.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.40.

Peter Boockvar, managing director at the Lindsey Group, said, "Bottom line, one has to go back to May '13 to see a yield this low for the cost of lending money to the U.S. government for 30 years with no inflation protection."

"Watching the daily drop in bond yields both in the U.S. but especially in Europe is certainly a site to behold, and the panic for paper (yield) seems to be accelerating," he added.

Today's auction came after the Treasury sold $27 billion worth of three-year notes on Tuesday and $24 billion worth of ten-year notes on Wednesday.