April 23 (Bloomberg) -- Demand at the U.S. auction of $35 billion of five-year notes from a group that includes pension funds and insurers approached the highest level in almost a year amid speculation on the Federal Reserve’s agenda and turmoil in Ukraine.

The sale drew stronger-than-average demand from all bidders, with a bid-to-cover ratio, a gauge that compares the amount bid with the amount sold, of 2.79, versus an average of 2.62 at the past 10 offerings. Direct bidders bought 18.6 percent of the notes, compared with an average of 11.4 percent at the past 10 sales. Treasuries rose as tensions between Ukraine and Russia intensified. The Fed meets next week.

“There was big selling of five-year notes coming into the week, and the sector cheapened up to attractive levels, especially for direct bidders,” said Thomas Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. “With the uncertainty about the Fed -- where it’s going and how fast it’s going to get there -- hanging over the market, the five-year note should hover around these fair levels for now, with no huge upside or downside.”