Foreign Demand for TSY Notes and Bonds Still Strong
ByPosted To: MBS Commentary
The Treasury Department this morning released Treasury International Capital data for January 2010. This report tracks flows of investment funds leaving and entering the U.S financial system. Foreign accounts bought a net total of $61.4bn in TSY notes and bonds in January 2010 . Compare that to $69.9bn in Dec and $117.9bn in November and $289.2 billion in January 2009. Notes are debt securities with a maturity between 1 year and 10 years (rate sheet influential). Bonds are debt with a maturity greater than 10 years. Both notes and bonds trade with a coupon. Yields are determined by the coupon and the price the market is willing to pay for that coupon clip. For instance, the 10 yr note is trading with a 3.625% coupon. Current market is 3.71%. The yield is higher than the coupon, the 10 year…(read more)