Treasuries Rise for Second Day Before $20 Billion 10-Year Sale
- Term premium shows investors accept yields below fair value
- Yield on German 10-year bond declines to all-time low
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Treasuries gained for a second day as the U.S. prepares to issue $20 billion of 10-year debt, the second of three note and bond auctions this week.
With yields on the debt near a two-month low, pre-auction trading of the securities on offer Wednesday signals they will be sold at a yield close to what was achieved at last month’s sale, which was the lowest in more than three years. The term premium, a gauge of the perceived riskiness of longer-dated securities, last week dropped to the lowest in at least half a century.