“People do expect to see higher rates, but they are looking for a gradual move,” said Tom Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp.
The 10-year notes were sold today at a bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, of 2.92. That’s the highest since March and compares with an average of 2.62 at the past 10 sales.
Indirect bidders, which include foreign central banks, bought 43.4 percent of the securities. Direct bidders, non- primary dealers buying for their own accounts, purchased 27.5 percent of the notes, the highest proportion since September.
The U.S. auctioned $30 billion in three-year notes yesterday. Indirect bidders purchased 29.9 percent, compared with 42 percent last month that was the most since August 2011.
The Treasury will conclude this week’s sales with a $13 billion 30-year bond auction tomorrow.