Bond Prices Edge Up on Light Volume As Investors Await Treasury Auctions
NEW YORK -- Bond prices edged higher yesterday. But trading volume was light as dealers and investors awaited a large supply of new U.S. government securities this holiday-shortened week.</br></br>The Treasury today is scheduled to auction $5.5 billion of new seven-year notes. On Thursday, it plans to sell $4 billion of new 20-year, one-month bonds.</br></br>That will complete the government's $15.5 billion midyear financing operation, which began last Tuesday with the sale of $6 billion of four-year notes at an average yield of 13.69%. Some analysts contend that yields will have to rise in order to attract investors to the new Treasury notes and bonds.</br></br>Yields on both issues "need to move closer to 14% before we get any significant investor" demand, said Samuel Kahan, a vice president of Heinold Commodities Inc., Chicago.</br></br>Late yesterday, the seven-year Treasury notes were trading in the when-issued market to yield about 13.85%. The 20-year, one-month bonds closed at about 13.75% in when-issued trading.