Foreigners are truly starved for investment options. No matter how much the US government tries to shake confidence in the dollar with massive deficits, foreign countries just won’t get the hint.
Foreigners represented 56% of 5-year note buying on Wednesday and then 60% of 7-year buying just today.
WSJ: The new seven-year notes were awarded a yield of 3.092%, compared with the 3.107% yield just before the 1 p.m. EDT auction deadline in the when-issued market. The note’s bid-to-cover ratio, a main gauge of demand, was 2.74, compared with 2.63 for the previous auction in July. The average is 2.44 from the past six auctions since the note, discontinued since 1993, was reintroduced in February.
Have other investment options around the world become so unattractive that receiving 3.1% for seven years of US inflation risk is looking better by the day? Or are dollar recyclers up to their old tricks?
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