U.S. benchmark 10-year Treasury yields fell to near-record lows on Wednesday after a $21 billion sale of new notes saw huge demand from investors that buy directly from the government.
So-called direct bidders, which can include large asset managers or other investors that can buy directly from the Treasury, took a record 45.6 percent of the sale, squeezing out dealers that took a record low 14.1 percent of the sale.
Investors were paid the lowest auction yield on record at a high yield of 1.46 percent. This is more than 4 basis points lower than where the notes had traded before the sale.
"Demand for Treasurys is very strong. It's very much a grab for safe assets internationally," said Carl Lantz, interest rate strategist at Credit Suisse in New York.
Some investors that take large positions prefer to purchase during auctions so that they are not required to reveal positions to dealers that intermediate trades.
The purchases can also have less impact on Treasurys prices, which can be subject to increased volatility from large positions.
Ten-year Treasurys yields initially fell as low as 1.45 percent, only marginally higher than a 200-year low set on June 1 of 1.44 percent. They later retreated and last traded at 1.50 percent.
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