• 677 days Will The ECB Continue To Hike Rates?
  • 677 days Forbes: Aramco Remains Largest Company In The Middle East
  • 679 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,079 days Could Crypto Overtake Traditional Investment?
  • 1,084 days Americans Still Quitting Jobs At Record Pace
  • 1,086 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,089 days Is The Dollar Too Strong?
  • 1,089 days Big Tech Disappoints Investors on Earnings Calls
  • 1,090 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,091 days China Is Quietly Trying To Distance Itself From Russia
  • 1,092 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,096 days Crypto Investors Won Big In 2021
  • 1,096 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,097 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,099 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,100 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,103 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,104 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,104 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,106 days Are NFTs About To Take Over Gaming?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Meager Foreign Participation in Treasury Auctions

Today's auction of $21 bln in 3-year treasury notes drew 24% participation from foreign investors (indirect bidders), which was above February's 22% but lower than the 2003 and 2004 averages of 27% and 45%.

Last month's 2-year auction drew 24% participation -- the lowest since November 2004, while the 5-year auction drew 21% participation -- the lowest since the records began in February 2003.

  • Although the high yield element of the US treasuries does remain a point of attraction for foreign investors, it is not reflected in the primary market auctions, leading us to believe that private investors (foreign central banks and offshore hedge) are mostly snapping them in the secondary market.

  • But the increasingly meager foreign participation in US treasury auctions could reflect a general backtracking in foreign demand for US paper in light of the combination of a looming end to the Fed rate hikes and the emergence of the dollar's external imbalances, which is not expected to acquiesce any time soon with oil prices on the rise.

  • The concern on US fixed income paper becomes highlighted when discouraged foreign participation in treasury auctions begins to: 1) raise the cost of government borrowing and; 2) further impacts the housing market as it drives up long term yields along with rising inflationary expectations.

 

Back to homepage

Leave a comment

Leave a comment