Treasury 10-Year Note May Yield 2.710% at Auction, Survey Shows

The Treasury’s $21 billion sale of 10-year notes may draw a yield of 2.710 percent, according to the average forecast in a Bloomberg News survey of seven of the Federal Reserve’s 22 primary dealers.

The securities, which mature in February 2024, yielded 2.720 percent in pre-auction trading. Bids are due by 1 p.m. New York time. The yield at the 10-year debt offering on March 12 was 2.729 percent. The record-low auction yield was 1.459 percent in July 2012.

The March auction’s bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.92, versus an average of 2.64 at the past 10 auctions.

Indirect bidders, a class of investors that includes foreign central banks, bought 43.4 percent of the notes at the last sale, versus 49.7 percent at the February offering. The average at the past 10 auctions was 44.8 percent.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 27.5 percent of the securities at the March sale. The average at the past 10 was 18.1 percent.

Ten-year notes have gained 3.8 percent this year, compared with a 1.9 percent return in the broader U.S. Treasuries market, according to Bank of America Merrill Lynch indexes. The benchmark notes lost 7.8 percent in 2013, versus a 3.4 percent decline by Treasuries overall.

Today’s offering is the second of three note and bond sales this week. The U.S. sold $30 billion of three-year debt yesterday at a yield of 0.895 percent and will auction $13 billion of 30-year securities tomorrow.

The sales will raise $13.5 billion of new cash, as maturing securities held by the public total $50.5 billion, according to the U.S. Treasury.

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

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