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" Foreign Buyers Pile Into Longer-term U S Dollar Securities"

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China Buys Treasuries, Proving Dollar Demise Overdone (Update2)

By Daniel Kruger and Anchalee "Anchie" Worrachate

Aug. 17 (Bloomberg) -- For the first time since the start of the global financial crisis, the U.S. government is breaking its reliance on short-term debt as foreign buyers pile into longer-term securities.

When the U.S. raised $75 billion last week, a group that includes international investors purchased a record amount of 3- year notes, the biggest share of 10-year notes since 2005 and almost half of the 30-year bonds sold, according to Treasury data. That helped extend the average maturity of U.S. debt from a 25-year low in the second quarter and showed diminishing concerns over the record U.S. budget deficit and inflation.

“Long-dated Treasuries are fantastic assets to have,†said Stuart Thomson, a fixed-income fund manager at Ignis Asset Management, which oversees the equivalent of $100 billion from Glasgow. “I have every reason to believe long bonds will rally. Inflation is subdued, and the Fed made it very clear they expect it to remain low.â€

Risk aversion is high on the list. The Bond market is the key indicator to what is really happening in the marketplace.

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who is going to buy UK Gilts...I gather we have quite a lot to issue shortly.

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