Weak treasury auctions raise worries about U.S. debt burden!
NEW YORK - July 30, 2009 - The U.S. Treasury sold $39 billion in five-year debt Wednesday in an auction that drew poor demand, raising worries over the cost of financing the government's burgeoning budget deficit.
It was the second lackluster showing in as many days, convincing analysts that the stellar results of debt auctions just a few weeks ago were a fluke and that Thursday's $28 billion seven-year offering could suffer a similar fate.
Under the weight of the ballooning deficit, the government has raised auction volumes and analysts now wonder whether the strain on the market is showing.
"Obviously everyone is inferring thattToday’s won't be good either," said James Combias, head of government bond trading at Mizuho Securities USA in New York. "Maybe you will see more interest tomorrow but I think the increase in the auctions and the size of them may be starting to have an effect. These are very large auctions."
Demand for the five-year notes was below average, measured by the bid-to-cover ratio of 1.92, the lowest in almost a year.
It was the second lackluster showing in as many days, convincing analysts that the stellar results of debt auctions just a few weeks ago were a fluke and that Thursday's $28 billion seven-year offering could suffer a similar fate.
Under the weight of the ballooning deficit, the government has raised auction volumes and analysts now wonder whether the strain on the market is showing.
"Obviously everyone is inferring thattToday’s won't be good either," said James Combias, head of government bond trading at Mizuho Securities USA in New York. "Maybe you will see more interest tomorrow but I think the increase in the auctions and the size of them may be starting to have an effect. These are very large auctions."
Demand for the five-year notes was below average, measured by the bid-to-cover ratio of 1.92, the lowest in almost a year.
