Foreign investors take less U.S. Treasury supply at auctions

NEW YORK (Reuters) – Overseas investors purchased fewer U.S. government debt issues at auctions in early July, supporting the view that foreign appetite for U.S. bonds is waning due to trade friction and a strong dollar.

Offshore private and government accounts bought $2.471 billion of the $22 billion in 10-year Treasury notes offered on July 11, down from $4.506 billion at the previous 10-year auction the month before, data from the U.S. Treasury Department released on Monday showed.

This was the lowest amount of 10-year notes they bought since September 2017.

Overseas investors bought $1.146 billion of $14 billion of 30-year bonds sold on July 12, lower than the $1.357 billion the prior month, according to the Treasury’s latest auction allotment data.

They purchased $3.973 billion of the $33 billion three-year note supply offered on July 10, which was the smallest amount since January. This was below the $5.649 billion they purchased in June.

As offshore demand for Treasury supply retreated, investment managers raised their purchases of U.S. government securities.

They bought $13.353 billion of the 10-year notes sold earlier this month, which was the most since the Treasury made this data available going back to 2000.

Fund managers purchased $8.584 billion in 30-year bonds, up slightly from $8.490 billion the prior month.

On the other hand, they bought $11.106 billion of three-year notes, less than the $12.587 billion they purchased the previous month.

The Treasury allotted $17.774 billion of three-year note supply to bond dealers earlier this month, which was their largest amount since September 2013.

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