April 8, 2019 / 7:46 PM / 3 months ago

UPDATE 1-Funds, foreigners buy more U.S. 2-year note supply in March

(Adds background, details on purchases)

NEW YORK, April 8 (Reuters) - Domestic money managers and overseas accounts including foreign central banks increased their purchases of U.S. two-year government note supply at an auction in late March, U.S. Treasury Department data released on Monday showed.

Fund managers bought $21.313 billion at a $40 billion 2-year note auction held on March 26, more than the $18.837 billion they purchased the previous month.

The U.S. Treasuries sector rallied in the last days of the first quarter as investors flocked into low-risk government debt due to worries about a weakening global economy and after the Federal Reserve signaled it would not raise interest rates in 2019.

The U.S. central bank also said it would stop the reduction of its holdings of Treasuries and mortgage bonds in September.

Overseas investors, another major group of holders of U.S. government debt, bought $5.128 billion of the latest 2-year supply, above the $4.619 billion they purchased the month before, according to the Treasury Department’s auction allotment data.

On the other hand, bond dealers’ purchases of 2-year notes fell to $13.252 billion from $16.246 billion in February.

At other auctions held the same week as the 2-year auction, U.S. investment managers bought $22.951 billion of 5-year notes, down from the $24.209 billion they bought the previous month.

They bought $20.033 billion in 7-year debt, up slightly from the $19.485 billion the prior month.

Overseas investors bought $7.116 billion of the latest 5-year supply, down a bit from the $7.728 billion they purchased the previous month.

They bought $6.688 billion of 7-year debt, nearly the same as the $6.686 billion they purchased the prior month.

Reporting by Richard Leong; Editing by Meredith Mazzilli

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