Strategist: Foreign demand in US Treasury auctions is not a driving factor, but an indicator.

John Briggs, interest rate strategist at French investment bank, stated in a report that foreign demand in US Treasury auctions has never been a major driver of overall auction demand, but can be seen as an indicator of overall interest from foreign investors during times of ample liquidity supply. He said that foreign participation in 10-year US Treasury auctions has been on the rise, currently accounting for 19% based on a three-month average, while participation in 5-year US Treasury auctions has risen to 15%, both reaching their highest levels since December 2023 and June 2023, respectively. Briggs stated, "Interestingly, foreign demand in 30-year US Treasury auctions has also risen to 14%, the highest level since October 2023." He mentioned that part of the increase in demand may be due to expectations of the Federal Reserve and hopes for a steeper yield curve.