The US Treasury sold $24 million in 10 year notes Wednesday with the yield in line with market rates as investors increasingly expect the Federal Reserve to reel in its stimulus.
The high yield was 2.62 percent, but the bid-to-cover ratio fell to 2.54, compared to the average for the last six auctions of 2.74, and the lowest since March 2009, according to Nomura Securities.
Non-dealers picked up 61.5 percent of the offer, and demand from indirect bidders rose to 46.3 percent.
“Fed tapering and bond fund outflow fears could be contributing to the recent drop in B/C ratio as some funds and dealers bid less aggressively,” said Nomura.
After the results were announced the market yield on the 10 year bond fell to 2.59 percent, compared to 2.64 percent late Tuesday.
Bid levels slip in 10 year Treasury auction
