Demand for Treasuries among foreign investors are also on the rise. Indirect bidding, a proxy gauge of demand from foreign investors, surged 50%, the highest since 2011. On Tuesday, a sale of $35 billion in five-year notes brought in 65% of indirect bidding, the highest since 2004. U.S. debt securities provide better yields than what is offered in many other developed countries. For example, 10-year Japanese government bonds yield 0.43% and 10-year German bunds yield 0.73%. [Supply, Demand Imbalance Keep Bond ETFs Afloat]
“Treasuries are too cheap to global rates,” Tom di Galoma, head of rates and credit trading at ED & F Man Capital Markets, said in the article.
The fixed-income market may have also been fueled by buying ahead of a typically slow half-day market after the Thanksgiving holiday.
iShares 7-10 Year Treasury Bond ETF
For more information on the Treasuries market, visit our Treasury bonds category.
Max Chen contributed to this article.