No Slack Seen for Treasury Demand
Despite being on track to offer some of the lowest yields in history, this week's auctions of $66 billion in Treasury securities are likely to get strong demand because investors expect new Federal Reserve stimulus that will keep yields under pressure.</br></br>"These auctions are going to go very well," said Eric Green, chief U.S. rates strategist at TD Securities. "The path of least resistance is lower yields, and there is every reason to believe that perception of the Fed doing something will persist up to the [Fed's September] meeting."</br></br>Mr. Green said it wouldn't be surprising to see the benchmark 10-year Treasury note's yield fall toward 1.5% this year. It ended at a record low 1.917% late Friday, down from 1.986% Thursday and 2.000% a week earlier. Yields move inversely to prices.</br></br>The Treasury is scheduled to sell $32 billion in three-year notes Monday, $21 billion in 10-year notes Tuesday and $13 billion in 30-year bonds Wednesday.</br></br>Also, the euro zone's deteriorating sovereign-debt crisis is expected to help keep demand high for U.S. government debt.