Treasuries Hit as US Sales Struggle to Lure Buyers

The world’s biggest bond market sold off after weak Treasury sales, with traders also weighing mixed economic data and remarks from Federal Reserve speakers for clues on the policy outlook.

Treasuries extended losses after the US sold $70 billion of five-year notes at 4.553% — above the pre-auction level of 4.540%. An earlier offering of $69 billion in two-year notes also came on the soft side.

Just a few days before the Fed’s favorite price gauge, a report showed US consumer confidence unexpectedly rose in May — though recession expectations increased as well.

“Treasury yields are rising to the high of the day after the 5-year auction was poor,” said Peter Boockvar at The Boock Report.

“This follows the 2-year auction earlier today that was mediocre — and will be followed by a 7-year tomorrow.”