An auction of five-year Treasury notes saw strong demand Thursday, with auction yield 0.6 basis points lower than the "when issued" yield. The five-year yield at auction has only been lower than its pre-auction yield during three of the last 10 auctions. Trading volume ahead of the auction was strong, said CRT Capital Group's Ian Lyngen, with five-years trading at 111% of their typical volume. The auction saw strong demand from indirect bidders, a group that includes foreign central banks. They took home 63.1% of bonds, compared with an average of 56%. Treasurys sold off ahead of the auction, and remained lower after the results were released. The five-year yield was up 3.1 basis points to 1.275%. Bond yields move inversely to prices.
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