Treasuries Draw Weakest Demand Since ‘08 at Auction as Fed Looms
- Two-year sale kicks off week’s $103 billion of coupon auctions
- Fed to keep door open for one 2016 hike: Credit Agricole
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The Treasury’s auction of two-year notes lured the weakest demand since 2008 as bond traders bet Federal Reserve policy makers this week will acknowledge signs of economic strength, bolstering the case for an interest-rate increase this year.
Benchmark two-year yields set a one-month high as the Treasury sold $26 billion of the maturity at steeper yields than indicated in pre-auction trading. A gauge of demand known as the bid-to-cover ratio was 2.52, the weakest at a two-year U.S. offering since December 2008. What’s more, Wall Street dealers were stuck with the highest share of a two-year sale since 2013.