For all the losses on Treasuries this year, demand for U.S. government debt remains stronger than before the financial crisis. Investors bid for $5.75 trillion of notes in government auctions in 2013, or 2.87 times the amount sold, data compiled by Bloomberg show. That’s the fourth-highest ratio since the Treasury Department began releasing the data in 1993, surpassed only in the past three years as demand peaked at 3.15 times in 2012. Before the Federal Reserve began its unprecedented stimulus in 2008, the bid-to-cover ratio never topped 2.65. While Treasuries are poised for the first drop since 2009 as the longest-term bonds suffer the world’s deepest declines, the willingness of foreign central banks, insurers and pensions to finance the largest debtor nation may temper a further jump in U.S. borrowing costs. Yields on the 10-year notes rose last week to the highest since 2011 and forecasts imply the Fed will cut its Treasury purchases by more than 50 percent from $540 billion this year after beginning to taper earlier this month…Bids for interest-bearing Treasuries outstripped the $2 trillion sold competitively this year by $3.75 trillion, data compiled by Bloomberg show. The bid-to-cover ratio was almost 20 percent greater than the average 2.44 times from 1997 to 2007.
Who says US Treasury Demand is fading…
