By Andrew Williams
The yields on 30-year bonds were eight basis points short of the highest in 10 months as the government prepared to sell today the $16 billion of the securities. 71.3 per cent of the 10-year notes at yesterday’s sale were purchased by indirect bidders, as compared with the 53.6 per cent in January and an average of 46.4 per cent for the past 10 sales. Stocks fell in Europe and Asia, along with the U.S. stock-index futures.

“The participation of foreigners was very, very high in yesterday’s 10-year auction,” said Michael Markovic, a senior fixed-income strategist at Credit Suisse Group AG in Zurich. “I expect to see a firm auction for the 30-year and after the financing is over we will likely trade a little bit more firmly because yields moved too high, too quickly in recent weeks.”

Ten-year note yields slipped one basis point to 3.65 per cent as of 11:02 a.m. in London. The 3.625 per cent security maturing in February 2021 rose 4/32, that is $1.25 per $1,000 face amount, to 99 25/32. Yesterday, the yield fell to 3.62 per cent, the least since February, 4. Thirty-year yields also fell by one basis point- at 4.70 per cent.

The MSCI Asia Pacific Index of shares fell 1.1 per cent to a one-week low. Futures contracts on the Standard & Poor’s 500 Index fell 0.5 per cent.

Yesterday, the U.S. 10-year yields reached a nine-month high of 3.76 per cent, surging from a nine-month low of 2.33 per cent on October, 8 as improving economic data weakened the demand for the safety of Treasuries, which is the world’s largest market for government bonds.