Treasurys gained Wednesday, reversing earlier losses, after the government saw sufficient demand for its largest two-year note auction in more than a decade.
Two-year note yields fell (UST2YR) 6 basis points, or 0.06%, to 2.28%.
The Treasury Department sold $32 billion of notes maturing in August 2010 to yield 2.38%.
Indirect bidders, a class of investors that includes foreign central banks, bought 29.5% of the sale, pretty close to the average of 30.4% in the last four auctions. Some traders said that's encouraging since it was the largest auction since at least 1992.
Investors bid $2.18 for every dollar offered, the lowest since February.
The government will also sell $22 billion in five-year notes tomorrow, the most since the Treasury began issuing the debt monthly instead of quarterly in 2003.
Durable goods
Treasurys has been under pressure earlier due to rising crude-oil prices and a report that showed a rise in the U.S. orders of durable goods in July.
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