A Mixed 10-Year Treasury Auction Fails to Alter Outlook

April 10, 2013 by Jon C. Ogg

US Treasury building
Source: Thinkstock
Wednesday was unusual in that the FOMC minutes from the March 19-20 meeting were released much earlier than expected. We could not help but wonder how that might impact the $21 billion ten-year Treasury Note auction today. The outcome seems to be mixed, and maybe immaterial if you are just watching stocks. The bid-to-cover ratio of 2.79 was slightly under the average, but the tendered amount was for over $58.6 billion. The auction went off at 1.795% for the 2.00% coupon based upon its price of $101.839.

Indirect bidders (foreign demand) were more active than normal with 37.3% of the auction. Banks and investment funds make up the direct bidders and their 29.1% of the auction was much larger than normal.

We currently show the 10-year Treasury yield at 1.78% and the 30-year Treasury yield looks to be 2.98%. The big issue remains that stocks are in a serious bull market. Bonds might not even matter right now, even if you consider that rates could rise handily ahead. We have the S&P up 1.2% at 1,588 and the DJIA up 0.9% at 14,810 at all time highs.

Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Posted in Investing | Comments Off on A Mixed 10-Year Treasury Auction Fails to Alter Outlook