US government bond yields declined after the first 20-year bond placement in decades

11 months ago

The yields on US government bonds declined on Wednesday after the worst-than-expected 20-year bond placement, the first in decades.

Yields on 10-year bonds dropped by 2.6 basis points to 0.685%.

The US Treasury Department placed 20-year government bonds worth $20 billion with a yield of 1.22%. It was the first placement with this maturity since 1986.

The demand-to-supply ratio of bonds was 2.53x, with primary dealers who were obliged to purchase the entire volume for which no direct or indirect buyers were found repurchasing 24.6% of the placement.

The US Treasury has placed bonds to finance measures to support the country’s economy in the context of the coronavirus epidemic. It is expected that 20-year-old Treasuries will be sold in three months for a total amount of $54 billion.

The yield of 30-year US government bonds decreased by 3.2 basis points to 1.4037%, two-year bonds – by 1 basis point to 0.1633%.

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