Yields on 20-year Treasuries hold declines after auction, Fed minutes

In a note to clients, Lou Brien, market strategist at DRW Trading, said the auction results were "mediocre to poor," pointing to a lower-than-average bid-to-cover ratio of 2.53, which is a measure of demand versus supply.

Last week, a 30-year bond auction priced at 5.216%, the highest yield since 2001, according to analysts, and slightly above market forecasts, suggesting investors sought a premium to take down the bond.

Markets later scrutinized the U.S. central bank's expected publication of minutes from its most recent policy meeting, with yields continuing to hold steady.

In the Fed minutes released Wednesday, investors sought signs that the policy-setting Federal Open Market Committee could entertain a rate hike despite Fed Chairman Kevin Warsh's decision not to offer forward guidance, said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities.

"What I think the market's looking to see is whether there are pockets of the Fed who have set their bar fairly low for a hike," said Goldberg.

The minutes showed that many officials believe a rate increase will be likely if inflation remains elevated.

WASHINGTON, Aug 19 (Reuters) - Yields on 20-year U.S. Treasury bonds held steady at lower levels on Wednesday after an auction and the release of Federal Reserve policy discussions, following declines sparked by an announcement from the U.S. Treasury Department that it would double liquidity support for long-dated Treasuries.

The easing pressure on U.S. borrowing costs came as longer-dated euro zone bonds also retreated from multi-year highs, a selloff fueled by governments' deteriorating fiscal situations, global oil supply shocks and inflation worries.

Following the auction, yields were last down 8 basis points on the day at 5.196%.