The Treasury announced Thursday a record $104 billion worth of bond auctions for next week, part of its herculean efforts to finance a rescue of the world's largest economy.

The sales will exceed the previous record of $101 billion set in auctions that took place in the last week of April and consist of two-year, five-year and seven-year securities. That record was matched by another $101 billion week in May.

Though next week's total was broadly in line with expectations, worries about supply have weighed on the U.S. government bond market, which will see a mammoth $2 trillion worth of new debt issued this year.

"Maybe the Treasury market reacted a little negatively and it will continue to be like this," said Suvrat Prakash, U.S. interest rate strategist with BNP Paribas in New York. "Supply announcements and auctions on the horizon will make the market a bit nervous about upcoming debt."

Bond prices were lower already in anticipation of the Treasury's announcement and continued to sell off in reaction.

The government is likely to raise about $85 billion in net new cash given that there are about $19 billion worth of coupon securities maturing during the week.

The Treasury's include $40 billion in 2-year notes on Tuesday, $37 billion 5-year notes on Wednesday and $27 billion in 7-year notes on June 25.

The U.S. bond market has been under pressure for three months, with benchmark yields surging to an eight-month high of 4 percent last week, as investors worried about a budget deficit expected to reach an astounding 13 percent of the economy this year.

The Treasury routinely sells billion of dollars worth of debt paper to fund the federal budget deficit.

The Treasury Department's report for May, released last week, pointed to a growing gap between government spending and income at a time when the economy is struggling to emerge from recession and tax revenues are likely to decline.

The U.S. government posted a $189.65 billion budget deficit in May, a record for the month and the eighth straight monthly deficit, the Treasury Department said on June 10.

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