Treasury bonds fell as speculation the European Central Bank may take additional measures to prevent the crisis in the euro region extends debt decreased the attractiveness of U.S. securities as a refuge.
The 10-year bond fell for the first time in four days before reports that economists said will show U.S. manufacturing extended for a month 16 companies added the most jobs since the recession began in December 2007. The descents down the yield on the 10 years older after reaching its lowest level in a week yesterday. The Federal Reserve is set to buy $ 7,000,000,000 and $ 9 billion of bonds maturing in June 2016-November 2017 today as part of its plan for growth.
"Treasuries are losing some of its appeal as a safe haven," said Marc Ostwald, fixed income strategist at Monument Securities Ltd. in London. "Yields yesterday reached levels that are downright unattractive. Labor data this week could decide if this correction in Treasuries continues."
The yield on benchmark 10-year note rose six basis points to 2.87 percent at 6:57 am in New York, according to Cantor BC market. The yield fell to 2.75 percent yesterday, the lowest level since 23 November. The guarantee of 2,625 percent, due November 2020 fell 16/32, or $ 5 per $ 1,000 face amount, to 97 30/32.
The yield on the 30-year bond rose five basis points to 4.16 percent. Fell to 4.05 percent yesterday, the lowest level since Nov. 5.
ten-year rates rise to 3.23 percent in late 2011, according to a survey of banks and securities firms with the most recent forecasts given the highest weights. Investors who bought today are lost around 0.2 percent after accounting for interest payments.
Manufacturing expands
The index of the Institute for Supply Management's factory will be 56.5 in November from 56.9 in October, based on the median estimate of economists surveyed by us. Figures above 50 signal growth.
"A strong ISM number will give investors hope the economic recovery is under way," Ostwald said.
ADP Employer Services say employment increased by 70,000 in November, a separate survey showed. The Labor Department will report on December 3 that employers added jobs for the second month, economists said.
Treasuries rose yesterday on speculation financial crisis spread to Portugal, Ireland and Spain. Ireland on November 28 became the second country to take advantage of EU aid, after Greece. The rescue package worth € Ireland 85000000000 ($ 111 million).
Trichet Comments
Standard & Poor's said Wednesday it may cut the credit rating of Portugal on concern the government has made little progress in promoting economic growth. Portugal costs increased loans at an auction today.
"Investors are concerned that there is more to come," wrote Kevin Giddis, president of capital markets fixed income brokerage firm Morgan Keegan Inc. in Memphis, Tennessee, in a note to clients.
ECB President Jean-Claude Trichet said yesterday the central bank's program of gift vouchers is "permanent" and "see what we decide," refusing to rule out an expansion of shopping. His comments helped push the euro today.
Europe to the debt crisis is "off" soon, Adam Carr, senior economist at ICAP in Sydney, wrote to clients today. "Things are going to disappear. The U.S. economy is doing very well."
The demand for security helped pull 10-year yields up 16 basis points from its highest level in November.
"It's interesting how little help a growing crisis of sovereign debt borrowed at rates markets," including George Goncalves analyst at Nomura Holdings Inc. in New York, wrote in a research note yesterday. "This just adds more details to our assertion that market rates can be fully price." Nomura is one of the 18 primary dealers required to bid in the sale of public debt.
Exchange spread
The demand for security is shown in the increasing diffusion of the exchange rate of two years. The gap widened to 31 basis points, most in four months. In this transaction, investors exchange fixed interest rates and floating. The spread is the difference between fixed rate and return on Treasuries of similar maturity. Because the figure is a type of bank with government performance, is used as an indicator of risk appetite.
Banks are charging more to lend to each other. The London interbank offered three-month dollar rate rose to 0.30 percent yesterday, the highest since August. Pacific Investment Management Co., which runs the world's biggest bond fund, said that the debt is attractive.
"In an environment of low growth, global bonds are an attractive investment option," according to a press release of Pimco, based in Newport Beach, California.
of U.S. government securities gave investors a loss of 0.7 percent last month, the most since March on the basis of Bank of America Merrill Lynch indices such as the Federal Reserve embarked on a plan to pump 600 billion U.S. dollars in the system banking.
0 comments:
Post a Comment