U.S. Treasury prices slip in light trading ahead of 2-year sale

By Emily Flitter

LONDON (BestGrowthStock) – U.S. Treasury prices fell on Monday in light trading ahead of the sale of $92 billion of new debt as a UK bank holiday kept activity before the U.S. open to a minimum.

There was little new information to trade on, with no scheduled Treasury purchases by the Federal Reserve and no significant data due.

A $35 billion sale of two-year Treasury notes set for 1800 GMT (1 p.m. ET) was to be the day’s main event. The U.S. Treasury Department was also scheduled to sell $57 billion in three-month and six-month bills.

Bettina Mueller, a fund manager at DWS Investment in Frankfurt, said prospects were modest for the two-year auction.

“I think looking back at the auctions before Christmas, they didn’t go that well,” she said. “It wasn’t a disaster but it wasn’t as good as the auctions before, so probably it won’t be that successful this week either.”

The two-year sale is the first of three note auctions that will see the Treasury offer $99 billion. A $35 billion auction of five-year notes and a $29 billion auction of seven-year notes will take place Tuesday and Wednesday, respectively.

“Because of the lower liquidity in the market (the auction) probably won’t go that well,” Mueller said.

She said futures trading indicated much lower volumes than usual, possibly as low as a tenth of the norm.

At 1133 GMT, the two-year note’s price was down, with a yield of 0.69 percent.

The 10-year note was down, taking the yield to 3.45 percent.

Five-year yields were at 2.12 percent and the ultra-long 30-year yield at 4.49 percent.

(Editing by John Stonestreet)

U.S. Treasury prices slip in light trading ahead of 2-year sale