The Treasury’s $13 billion sale of 30-year bonds may draw a yield of 3.324 percent, the highest since March 2012, according to the average forecast in a Bloomberg News survey of eight of the Federal Reserve’s 21 primary dealers.
The securities, which mature in May 2043, yielded 3.315 percent in pre-auction trading. Bids are due by 1 p.m. New York time. The yield at the last offering of long bonds, on May 9, was 2.98 percent, and the record-low auction yield was 2.580 percent in July.
The May sale’s bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.53, versus an average of 2.58 at the past 10 auctions.
Indirect bidders, a class of investors that includes foreign central banks, bought 38.8 percent of the bonds at the May sale, versus 31.4 percent at the April auction. The average at the past 10 offerings was 36.7 percent.
Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 15.5 percent of the securities at last month’s sale. The average for the past 10 auctions is 13.8 percent.
Thirty-year bonds have lost 7 percent this year, compared with a 1.6 percent drop in the broader U.S. Treasuries market, according to Bank of America Merrill Lynch indexes. Long bonds returned 2.5 percent in 2012, versus a 2.2 percent gain by Treasuries overall.
The U.S. sold $21 billion of 10-year debt yesterday at a yield of 2.209 percent and auctioned $32 billion of three-year notes on June 11 at a yield of 0.581 percent.
Primary dealers trade government securities with the Fed and are obliged to participate in Treasury sales.
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