Thursday, June 30, 2011

Treasury Market Selling Off?

From the WSJ:

For the third consecutive session, Treasury investors on Wednesday balked at buying new bonds at a large government-debt auction, sending prices lower and yields higher.

The yield on the benchmark 10-year note reached 3.11%, its highest since May 25. Yields on the 10-year note have risen every day this week, adding about 0.24 percentage point since Friday and sparking speculation that the bull run in the bond market may have passed its peak.

The Treasurys on sale on Wednesday were $29 billion of seven-year notes. That followed sales of two- and five-year notes, all of them showing low levels of demand in the private sector and among foreign buyers.

The poorly received auctions raised eyebrows ahead of Thursday's official finish of the Federal Reserve's second bond-buying initiative, a $600 billion "quantitative easing" program widely known as QE2.

This is something I've been writing about for the last few week (see here, here and here).