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U.S. TIPS breakeven rates hit session highs after auction
December 22, 2016 / 7:49 PM / in a year

U.S. TIPS breakeven rates hit session highs after auction

NEW YORK, Dec 22 (Reuters) - The U.S. bond market’s gauges on inflation expectations rose to session highs on Thursday following robust investor demand for $14 billion worth of five-year Treasury Inflation Protected Securities supply.

The sum of direct and indirect bidder purchases, which is seen as a gauge of investor appetite, accounted for about 81 percent of the supply offered, which was a record amount, Treasury data showed.

The ratio of bids to the amount offered was 2.68, which was the strongest since a five-year TIPS auction in April 2014.

The yield at the latest five-year TIPS sale was 0.120 percent, which was the highest yield at a five-year TIPS auction in a year.

On the open market, the five-year inflation breakeven rate , or the yield difference between five-year TIPS and regular five-year Treasury notes , was 1.86 percent, up 5 basis points from late on Wednesday, according to Tradeweb.

The 10-year breakeven rate was last at 1.97 percent, up 4 basis points from late on Wednesday, Tradeweb data showed.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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