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The U.S. Treasury sold $39 billion in five-year debt Wednesday in an auction that drew poor demand, raising worries over the cost of financing the government’s burgeoning budget deficit.

It was the second lackluster showing in as many days, convincing analysts that the stellar results of debt auctions just a few weeks ago were a fluke and that Thursday’s $28 billion seven-year offering could suffer a similar fate.

Under the weight of the ballooning deficit, the government has raised auction volumes and analysts now wonder whether the strain on the market is showing.

“Obviously everyone is inferring that tomorrow’s won’t be good either,” said James Combias, head of government bond trading at Mizuho Securities USA in New York. “Maybe you will see more interest tomorrow but I think the increase in the auctions and the size of them may be starting to have an effect. These are very large auctions.”

Demand for the five-year notes was below average, measured by the bid-to-cover ratio of 1.92, the lowest in almost a year.

This followed a poor two-year auction on Tuesday. In a further sign of a weak sale, yields at the auction were well above expectations, known as a “tail.”

A key proxy for foreign interest, the indirect bidder category, was slightly above the average of auctions over the past year at 36.6 percent but far below the most recent sale.

“It was just a horrendous result,” said William O’Donnell, head of U.S. Treasury strategy at RBS Securities in Greenwich, Connecticut.

“It was the weakest bid-to-cover since September 2008, and by my numbers it was the biggest tail since February 1993. It was just a very, very weak result.”

The tail indicates that dealers drove an unexpectedly hard bargain to raise yields, and lower prices, to buy the bonds. Ultimately, this could raise interest rates throughout the economy at a faster rate than might be appropriate given the lingering effects of the worst recession in decades.

“If rates unwind higher and too quickly — driven not by the Fed but by the old bond vigilantes — that will be the house of pain for all risk markets,” said George Goncalves, head of fixed income rates strategy with Cantor Fitzgerald in New York.

Economic data may also play a role in Thursday’s auction. A bigger than expected rise in weekly data on claims for jobless benefits, due at 8:30 a.m., could hurt appetite for risky assets, which might benefit safe-haven government bonds.

Also, the month end tends to produce increased appetite for bonds.

Five-year notes fell in price and were last trading down 6/32, with the yield rising to a four-week high around 2.66 percent.

“It was pretty poor underwriting and there has to be some concern somewhere in the Treasury about the inability to underwrite the supply,” said John Spinello, Treasury bond strategist at Jefferies & Co in New York. “It’s a little disconcerting to the market. It creates a negative psychology before the seven-year notes to be bid on tomorrow.”

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