Treasury Department auctions $35B of 5-year notes at a high yield of 1.467%


U.S. Treasury prices remained lower on Wednesday as the market absorbed a fresh supply of five-year Treasury notes.

The Treasury Department auctioned $35 billion in five-year notes at a high yield of 1.467 percent, compared to 1.463 at last month's sale. The bid-to-cover ratio, an indicator of demand, was 2.57, stronger than the 2.50 recent average.

The yield on the five-year Treasurys was unchanged at 1.438 percent. The yield on the benchmark 10-year note rose 1 basis point to 2.15 percent.


"Following the rally in Treasuries on Tuesday, we continue to hold a negative bias towards the upcoming five-year note auction," analysts at Societe Generale said in a note. "The five-year note is trading rich both on asset swap and on the curve."

The rise in U.S. bond yields, which move in the opposite direction to the price, came as weak Chinese economic data triggered a sell-off in global stock markets. The weakness in share markets could limit any sell-off in the Treasury market, analysts said.

Earlier, Atlanta Federal Reserve President Dennis Lockhart said the Fed's decision to delay a rate hike last week shows natural caution after the deep shock of the 2007 to 2009 financial crisis and recession.

"That reflects some learning from the experience...That we have been burned," Lockhart said.

The preliminary China manufacturing purchasing managers' index (PMI) fell to a six-and-a-half-year low of 47.0 in September, below a 47.5 forecast by analysts in a Reuters poll, data showed.

Read MoreChina PMI falls to 6-1/2 year low in September

The flash September manufacturing PMI for the U.S. came in unchanged month over month at 53. The number is also slightly above the expected 52.8.

Reuters contributed to this report.