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Investors clamor to safe haven treasuries

11-24-2011 14:01 BJT

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Even though markets are becoming increasingly concerned about the worsening debt situation in the U.S., investors still consider it the best safe haven around. The U.S. Treasury sold 29 billion dollars worth of seven-year notes, at a record low auction yield.

Investors clamored to the safety of U.S. Treasuries, as troubles on the other side of the Atlantic mounts. In particular, Germany’s bond sale on Wednesday was the least successful since the launch of the euro. Poor demand for German bunds signaled Europe’s debt crisis is spreading to the eurozone core.

Treasury notes drew a yield of 1.415 percent, the lowest rate the U.S. government has ever had to pay to sell this debt maturity. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered came in at 3.2. That’s the highest since May.

Compare that with an average of 2.8 for the previous 10 sales. Since the auction results were announced, benchmark 10-year notes and 30-year bonds also saw an up in demand, pushing yields on those maturities down as well.

 

Editor:Zhang Rui |Source: CNTV.CN

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