He continued, "It shows that there is good demand for these securities at current yield levels."

We would view a yield level of 8 3/4 percent on the 30-year bond as a time to sell bonds.

At the higher yield levels, demand for the new notes was strong.

It is the lowest yield level on a 10-year note since 1967.

But the market may be reaching some critical yield levels, he added.

At current yield levels, demand for the new notes should be strong, traders said.

Analysts were divided as to whether the notes would attract much interest at current yield levels.

But if the increase is much higher, investors could decide to sell with the market already at such high price and low yield levels.

"There is no buying, even though we are at yield levels people would have killed for two weeks ago," a Government bond trader said.

"If anything, the numbers kind of argue that we should be moving to higher yield levels," one government bond trader said.