Treasury Three-Year Notes May Yield 0.341% at Sale, Survey Shows

The Treasury’s $32 billion sale of three-year notes may draw a yield of 0.341 percent, according to the average forecast in a Bloomberg News survey of 10 of the Federal Reserve’s 21 primary dealers.

The notes, which mature in April 2016, yielded 0.34 percent in pre-auction trading. The record-low auction yield of 0.327 percent was reached Dec. 11. The amount being offered today is unchanged from the previous 30 sales of the maturity. Bids are due by 1 p.m. New York time.

The March three-year note offering’s bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 3.51, after reaching a record 3.96 at the October sale. The average at the past 10 auctions was 3.60.

Indirect bidders, a class of investors that includes foreign central banks, bought 20.6 percent of the notes at the March 12 sale after being awarded 18 percent the month before, the lowest level on record. That compared with 28.4 percent at the January auction and an average of 26.6 percent at the past 10 offerings.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 23.4 percent of the securities at the last sale, compared with a record high 26.9 percent at the February offering and an average of 19 percent at the past 10 auctions.

Treasury three-year notes have gained 0.2 percent this year, compared with a return of 0.6 percent in 2012, according to Bank of America Merrill Lynch indexes. The broader Treasuries market has returned 0.5 percent this year after gaining 2.2 percent last year.

The Treasury Department is selling $66 billion in notes and bonds this week. It’s due to auction $21 billion of 10-year securities tomorrow and $13 billion of 30-year debt on April 11. The sales will raise $6.7 billion of new cash, as maturing securities held by the public total $59.3 billion, according to the Treasury.

Primary dealers trade government securities with the Fed and are obliged to participate in Treasury sales.

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