Bonds
Treasury Auction Deluge Set to Test Investors’ Appetite for Debt
- Rise in yields above 4% in 10 years is seen attracting buyers
- Smooth 30-year sale hinges on signs of cooling in CPI report
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Bulging sales of US Treasuries are about to deliver a major test of investor demand and determine whether a selloff has room to run, as the market braces for the biggest round of refunding auctions since last year.
Yields have surged since late July amid evidence of a resilient US economy, and after the Treasury shocked traders last week when it signaled greater borrowing needs. A rising US budget deficit and a poor fiscal outlook at a time of near full employment contributed to the move by Fitch Ratings to strip the US of its top rating last week.