Bond Auction
a.k.a. Treasury auction
The sale where a government sells new bonds to investors, who bid for them and set the interest rate it pays.
In plain English
The sale where a government sells new bonds to investors, who bid for them and set the interest rate it pays.
Governments borrow by selling bonds at a bond auction. Big investors submit bids, and the result decides the yield the government will pay on that batch of debt.
Traders watch the demand. A strong auction, with lots of bids, says the world is happy to lend. A weak or 'tailing' auction, where the government has to pay a higher yield than expected, can push rates up and move the currency.
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