Reply #59: Weak (Treasuries) lose strength ahead of auction [View All]

[UpInArms]

http://www.marketwatch.com/news/story.asp?guid=%7B8ECA536C%2D1739%2D45DA%2D9474%2DFD952E4E57A7%7D&siteid=mktw

NEW YORK (MarketWatch) - Long-term Treasurys fell late Wednesday morning, pushing yields higher as investors lightened holdings ahead of an afternoon auction of five-year notes that will be watched closely for news of foreign central bank purchases.

In recent trading, the 10-year bond was down 3/32 at 97 3/32 with a yield of 4.37%, after touching a seven-week low of 4.43% earlier in the day.

The five-year note was unchanged at 99-27/32 with a yield of 4.03% and the 30-year bond down 12/32 at 110 11/32 with a 4.68% yield.

This afternoon the Treasury will auction $15 billion in five-year notes this afternoon.

The five-year bond is preferred by many central banks, but lately the Treasurys market has been undermined by fears that these institutions are diversifying their reserves into the euro and shedding dollar-denominated assets

In March about 43% of the purchasers were "indirect bidders," a category that includes foreign central banks, according to Morgan Keegan bond analyst Kevin Giddis.

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