Lackluster U.S. Bond Auctions Add to Worries of Foreign Pullback
- Indirect bids signal overseas buyers ‘sat this round out’: BMO
- Lowest yields since January didn’t help draw demand, either
State Street CIO Says It's Not a Time to Be Risk-Off
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For the U.S. to borrow cheaply as it boosts borrowing, it’s going to need overseas investors to step up at its debt auctions. The early indication from this week’s $64 billion slate is that those buyers may be turning skittish.
Whether it’s the ramped-up trade rhetoric, swelling government deficit projections or just yields at the lower end of their recent range, indirect bidders retreated during this week’s auctions. While the data may not be a perfect gauge of foreign interest, BMO Capital Markets strategists say they “suspect it will be made clear that foreign players sat this round out -- or were at least much lighter than normal.”