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UPDATE 1-Funds buy fewest U.S. 10-year notes at auction since 2014
December 22, 2016 / 9:13 PM / a year ago

UPDATE 1-Funds buy fewest U.S. 10-year notes at auction since 2014

(Adds details on Dec note sale; background on Fed, Treasury
market)
    NEW YORK, Dec 22 (Reuters) - Large investment managers
bought the fewest U.S. 10-year Treasury notes at an auction
since November 2014, while they purchased nearly the same amount
of 30-year Treasury bonds as they did in November, Treasury data
released on Thursday showed.
    Their latest purchases occurred prior to the Federal
Reserve's expected decision on Dec. 14 to raise interest rates
by a quarter point to a target range of 0.50 percent to 0.75
percent. 
    Fed policy-makers hinted they might raise interest rates as
many as three times in 2017 if the U.S. jobs market improves
further and inflation moves closer to its 2 percent goal. 
    Longer-dated Treasury yields had reached their highest
levels since September 2014, propelled by bets of faster growth
and inflation from fiscal stimulus under a Trump administration.
    The U.S. Treasury Department awarded investment funds $7.839
billion of the $20 billion in the 10-year note auction it
offered on Dec. 12, which was the lowest amount since November
2014.  
    This compared with the $9.205 billion of 10-year note supply
it awarded to this group in November. 
    The 10-year notes were sold at a yield of 2.485 percent, the
highest at an auction since September 2014.
    Investment funds bought $7.389 billion of the $12 billion
30-year bonds offered on Dec. 13. This compared with $7.935
billion the prior month, according to Treasury data.
    The 30-year bonds were sold at a yield of 3.152 percent, a
level not seen since September 2014.  
    Overseas investors, another major group of holders of U.S.
government debt, bought $4.077 billion of the latest 10-year
supply, which was the most they bought a 10-year auction since
August. They purchased $3.018 billion in 10-year notes in
November.
    Foreign investors bought $925 million of 30-year bonds, down
from $1.668 billion the prior month and the least since
September.

 (Reporting by Richard Leong; Editing by Chizu Nomiyama)

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