Treasurys Slip Below Highs for Day
NEW YORK--Prices of Treasury debt were up Tuesday afternoon but fell below the highest levels of the day, failing to benefit from strong demand on a $40 billion sale of three-year notes.</br></br>Investors braced themselves for the minutes for the March rate-setting policy meeting due at 2 p.m. EDT. Federal Reserve Bank of Minneapolis President Narayana said that the central bank will need to sell its mortgage-backed securities at some point as part of the efforts to normalize its bloated balance sheets and easy monetary policy.</br></br>The amount of bids for the three-year notes auction was 3.1 times the amount on offer, compared with 3.13 last month and 2.83 in February.</br></br>Indirect bidders, a proxy for demand from foreign buyers including central banks, took 52% of the supply, compared with 51.8% in March and 51.2% in February. The direct bidders, a category including non-primary dealers, banks, money managers and depository institutions who have direct accounts to submit bids to the Treasury auctions, was 11%, compared with 10.3% in March and 10.1% in February.</br></br>"This was a solid auction that hit all of the six-auction averages above," said William O'Donnell, head of U.S. government bond strategy at RBS Securities in Stamford, Conn.