May 9, 2019 - Economy

A worrisome trend: Weakest 10-year note auction since 2009

Dion Rabouin

This image is a birds-eye view of the Treasury Building and the street next to it in DC. The Washington monument is seen in the distance. — The Treasury Department. Photo: Chip Somodevilla/Getty Images

Demand for benchmark 10-year notes at Wednesday's U.S. Treasury auction was the worst in a decade, data shows, following Tuesday's sleepy 3-year Treasury note auction that also drew lackluster demand.

Why it matters: The historically weak auctions have come despite falling stock prices and strong buying of safe-haven U.S. debt for much of the year, showing diminishing appetite among some investors.

Worth noting: Data on foreign buyers of Treasury notes is reported on a lag, so it's not yet possible to know whether diminishing Chinese purchases are responsible. However, foreign investors, especially China and Japan, have accounted for a declining share of U.S. government debt buys during the early months of the year.

Traders tell Axios there's no clear fundamental reason for the drop.

Go deeper: Bond yields are at historic lows around the world

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A worrisome trend: Weakest 10-year note auction since 2009

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