November 7, 2018 / 9:46 PM / 8 months ago

UPDATE 1-Foreign purchases at U.S. bond auctions rise in late October

    * Foreigners buy most two-year notes at auction since July
    * Fund managers purchase less Treasuries in late October

 (Recasts, adds background)
    NEW YORK, Nov 7 (Reuters) - Foreign purchases of U.S.
Treasury debt increased in late October, amid concerns
international appetite may be waning due to increased federal
borrowing to finance the government's widening budget deficit,
Treasury data released on Wednesday showed.
    The sales of the two-, five- and seven-year Treasuries,
worth a combined $108 billion, came after a dramatic bond market
selloff in early October due to worries about rising inflation
and a faster pace of interest rate increases from the U.S.
Federal Reserve.
    During the market rout, two-year            and five-year
           Treasury yields hit decade highs at 2.91 percent and
3.09 percent, respectively. The seven-year            yield
reached a 7-1/2-year peak near 3.20 percent. 
    Treasury yields retreated from those levels at the time of
the auctions in late October.
    Overseas investors, a major group of holders of U.S.
Treasuries, bought $6.254 billion of the $38 billion in two-year
notes offered on Oct. 23. This was the highest amount they
bought since July 2017.
    They bought $5.023 billion of the $39 billion in five-year
debt sold on Oct. 24, marking their largest purchase since
    They bought $4.750 billion of the $31 billion in seven-year
notes offered on Oct. 25, the most purchased since August.
    Investment managers, however, bought less Treasury supply
late last month, Treasury data showed. They purchased $14.764
billion in two-year notes - the lowest amount since May.
    Fund managers bought $17.479 billion of five-year notes,
their smallest purchase since January, while they purchased
$15.914 billion in seven-year debt, the lowest since March.

 (Reporting by Richard Leong, editing by G Crosse)
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