US Treasury bond prices slightly higher

Prices for US Treasury bonds were higher on Wednesday after the release of the minutes from this month’s meeting of the Federal Reserve and an auction of $13 billion in five-year paper. The auction drew a bid-to-cover ration of 2.60, higher than at the April auction, but only drew indirect bids of about 19 percent, much lower than April’s figure of 38.7 percent. Among other things, indirect bids reflect interest from foreign banks. The main thing driving the higher prices, however, seemed to be investors looking for a safe place for their money after declines in the global equities market and a disappointing private sector report on jobs ahead of the official US numbers on Friday.

Two-year Treasury bonds saw prices up slightly, with yields of 4.88 percent Five-year issues were yielding 4.818 at the deadline for bids on the new issues, while ten-year Treasuries yielded 4.87, slightly lower than Tuesday’s late yield of 4.89 percent. Thirty-year bonds yielded 5.01 percent, again just slightly lower than their yield of 5.02 percent on Tuesday.

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