Indirect bidders, an investor class that includes foreign central banks, purchased 21.9 percent of the notes, compared with an average of 31.5 percent for the past 10 sales.
Primary dealers bought 53.3 percent of the securities today, the most since August.
The previous record-low yield at a three-year note auction was 0.334 percent in September 2011. The securities yielded 0.392 percent at the Nov. 6 sale.
“It was a very good auction; it came where everyone expected it,” said Ray Remy, head of fixed income in New York at Daiwa Capital Markets America Inc., which as a primary dealer is obliged to bid at U.S. debt auctions. “The directs bought more than the indirects, and we haven’t seen that before. There’s a lot in play with the FOMC tomorrow and the fiscal- cliff negotiations between the House and the president.”
Three-year notes have returned 0.6 percent this year, compared with a 2.7 percent return for Treasuries overall, according to Bank of America Merrill Lynch indexes.
The Fed will announce tomorrow after the policy meeting that it will begin buying $45 billion in Treasuries each month, pushing its balance sheet almost to $4 trillion, according to a Bloomberg survey.
Forty-eight of 49 economists polled predict the FOMC will purchase the securities to bolster an existing program to buy $40 billion in mortgage bonds each month. Policy makers pledged in October to continue that plan until the labor market improves “substantially.”
A program known as Operation Twist, in which the Fed sells shorter-maturity Treasuries and buys longer-dated debt, is due to expire at the end of the month. As part of the plan, the central bank purchased $1.4 billion of Treasury Inflation Protected Securities today maturing from January 2021 to February 2042.
Treasuries fell earlier as the ZEW Center for European Economic Research said its index of German investor and analyst expectations, which is designed to predict economic developments six months in advance, climbed to 6.9 this month from minus 15.7 in November.
Bondholders tendered Greek bonds with a face value of more than 31 billion euros ($40 billion), a Finance Ministry official said. The official asked not to be identified because he isn’t authorized to speak publicly. Greece was seeking to use a 10 billion-euro loan from Europe’s bailout fund to retire about 30 billion euros of debt issued earlier this year.
The U.S. faces a fiscal cliff of $607 billion in automatic spending cuts and tax increases starting Jan. 1 if lawmakers can’t reach agreement. The Congressional Budget Office has said the stalemate probably would lead to a recession in the first half of 2013.