April 22, 2014 / 5:45 PM / 6 years ago

U.S. primary dealers buy most 2-year notes since May

NEW YORK, April 22 (Reuters) - Wall Street’s top bond firms bought the most two-year government notes in 11 months at an auction on Tuesday, which was the first part of this week’s $96 billion coupon-bearing federal debt supply, according to U.S. Treasury data.

Primary dealers, or the 22 Wall Street dealers that do business directly with the Federal Reserve, bought 57.68 percent of the $32 billion in two-year Treasuries issue offered.

This was more than 37.53 percent they purchased in March and the biggest share they bought since May 2013.

These bond firms which include the broker-dealer arms of JPMorgan & Chase, Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley stepped up their purchases as demand from other two categories of bidders fell.

Foreign central banks and other indirect bidders bought 23.36 percent of latest two-year Treasuries supply, down 40.94 percent in March and their smallest share in four months.

Investment funds and other direct bidders bought 18.95 percent of latest two-year Treasuries supply, down from 21.53 percent in March and their smallest share since last July.

The U.S. Treasury will sell $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday. (Reporting by Richard Leong; Editing by Chizu Nomiyama)

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