MORNING BRIEFS

U.S. forced to pay higher interest rate on debt issue
Investor demand for a U.S. government-debt issue was lower than expected, forcing a higher interest rate to be paid and offering an early indication that funding the massive stimulus might be more expensive than previously thought. The development also prompted some experts to question whether investors are becoming less interested in buying Treasuries. The New York Times (25 Mar.)


Gilt auction fails for first time in 7 years
The U.K.'s Debt Management Office said its tranche of government-guaranteed bonds worth £1.75 billion attracted bids of only £1.63 billion, raising concerns about an oversupply in bond markets. The Treasury moved to squelch such fears. "It would be wrong to read anything into the results of one auction event, which depends on the gilt on offer, demand and market conditions on the day," a Treasury spokesman said. "Demand for gilts clearly remains strong, and the small shortfall in funding today can be made good in future auctions." The Times (London) (25 Mar.) , Financial Times (26 Mar.) , International Herald Tribune/Reuters (25 Mar.)


Canadian official projects 8.5% contraction in Q1 GDP
Canada's GDP is headed toward a first-quarter contraction of 8.5%, said Kevin Page, the Canadian Parliament's independent budget officer. If Page's projections are correct, Canada will suffer this year its worst economic conditions since the end of World War II, a finance critic from the Liberal Party said. Page said he was handicapped by the government's refusal to give him some of the data he needed. Financial Post (Canada)/Reuters (25 Mar.)

Pimco, BlackRock consider forming bank-asset mutual funds
Pimco and BlackRock, two of the biggest fund managers in the U.S., said they are considering creating closed-end mutual funds that would give individual investors access to bank assets purchased under a program announced this week by Treasury Secretary Timothy Geithner. The program is a "very good opportunity for investors," said Curtis Arledge, co-head of fixed-income investing at BlackRock. Gulf News (United Arab Emirates)/Reuters/Los Angeles Times-Washington Post News Service (24 Mar.)