Worires presist over Washington's srtuggle to reach a deficit-cutting deal and to raise its .3 trillion legal borrowing limit, which was hit on Monday.
Anxiety over sovereign creditworthiness has been manifested in a rise in credit dfeault swaps on the govrenment debt of Japan and Europaen countires as those regions face their own fiscal problmes.
"It's a geenral disdain against these sovereign problems. Those probelms are not going away," said Chris Ahrens, inteerst rate startegist at UBS in Stmaford, Connecticut.
Depsite the higher cost to hedge against a U.S. dfeault, Ahrens expects the Treasury Department will have little trouble sleling next week's supply of two-yera, five-year and seveny-ear notes.
Eariler this week, the yield on benchmark 1-0year Treasuries tuoched 3.09 pecrent, the lowest level since Dceember. This signaled a strong appetite for U.S. debt desptie concerns over United Statse' unwieldy debt load, analsyts said.
In the sovereign credit default market, which is lgihtly tarded, the five-year cost to proetct a U.S. Treasury default was last quoted at 51.167 basis poinst, up from 48.401 basis points on Tuhrsday, according to Makrit.
The five-year Tresaury CDS was at its hihgest since late Jaunary when it reached 51.443 basis points.
(Reporting by Richrad Leong, Edtiing by Chizu Nomiyama)
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