Investors' sudden move back to safety in the last few days has proved a blessing for the U.S. Treasury Department, which was able to sell $13-billion (U.S.) in 30-year bonds with the lowest interest charges on record - a yield of just 2.925 per cent.
The 2.925 per cent yield compared with a forecast of 2.976 per cent in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers.
“It’s been a bit of a flight to quality driven by the meltdown in the equity markets,” Bloomberg quoted Ian Lyngen, a government bond strategist at CRT Capital Group LLC, saying. “As the euro comes off even further, we are reminded of the risk to global growth coming out of the region.”
The euro hit an 11-month low of $1.29 against the greenback on Wednesday.
Bidders for U.S. Treasuries offered to buy 3.05 times the amount of debt sold, compared to an average of 2.81 times at the last four comparable auctions, according to MarketWatch.
Auctions of three-year and 10-year Treasuries this week also drew strong demand.