Treasuries fell after reports showed initial jobless claims fell and consumer spending advanced

Treasuries fell after reports showed initial jobless claims fell and consumer spending advanced.

Benchmark yields rose for a fourth week as the government said it would auction 99 billion U.S. dollars in notes next week, the same amount sold in the last two months. U.S. debt has handed investors a loss of 2.1 percent this month, the biggest since December 2009, Bank of America Merrill Lynch index shows.

"We have to drift to higher rates to the provision of next week," said Jason Rogan, director of operations for U.S. government New York, Guggenheim Partners LLC, a brokerage for institutional investors. "We are in the typical commercial rental, so no big bets will be made until the new year."

The yield on the benchmark 10-year advanced four basis points, or 0.04 percentage point to 3.39 percent at 1:59 pm in New York, according to BGCantor Market Data. The price of 2,625 per cent security due in November 2020 fell 9 / 32, or $ 2.81 per $ 1,000 face amount, to 93 21/32.

ten-year yields hit a seven-month high of 3.56 percent on Dec. 16 and had their longest streak of weekly gains since May 2009, when he completed a seven-week gain on debt exceed the government's concern demand. The yield rose six basis points this week.

Trading in Treasury bond stood at 2 pm in New York tomorrow and remain closed throughout the world to celebrate Christmas. Trading in the UK will be closed December 27 and December 28 in observance of Christmas and Boxing Day.

Treasury Volume

About $ 165 billion in Treasuries changed hands yesterday through ICAP Plc, the lowest level since 26 November, which was on Thanksgiving after the U.S., according to the most agent in the world between operators. The average daily volume this year was 251 billion U.S. dollars.

The Treasury announced today that it will auction 35 billion in bonds to two years on December 27, the same amount of debt in five years the following day and $ 29 billion in bonds for seven years on 29 December.

"Next week is all about supply, and that's what the market will start to turn," said David Ader, head of government bond strategy in Stamford, Connecticut, of CRT Capital Group LLC. "The economic data have improved enough to make us believe that the risk of decline has decreased, but at the same time, information is more balanced here than it seems. We still have 9.8 percent unemployment and very low inflation . The market is trying to find some stability. We must be on a wide range of 2.75 percent, to 3.75 percent next year. "

Jobless Claims

Initial claims for unemployment insurance decreased in 3000 to 420,000 in the week ended Dec. 18, the Labor Department figures showed today. And collecting those benefits fell last week to 4.06 million.

The U.S. unemployment rate rose in November to 9.8 percent, the highest since April, while hours worked and incomes have stagnated, the Labor Department reported on 3 December.

Household purchases by 0.4 percent last month after an increase of 0.7 percent in October, which was almost two times higher than previously estimated, the Commerce Department reported today. preferred measure of inflation the Federal Reserve remained at a record low.

The difference between the rates of 10-year bonds and Treasury Inflation Protected Securities, an indicator of expectations operator in consumer prices during the life of the securities is known as the equilibrium rate, has changed little at 2.32 percentage points today, compared with this year's low of 1.47 percentage points.

Fed LBO

The Fed bought $ 26 billion in Treasury bills this week as part of its effort to keep interest rates low and generate long term economic growth. Next week the central bank will conduct two rounds of purchases of assets, the purchase of six billion to $ 8 billion in bonds maturing in June 2013 to November 2014 on 28 December and $ 4 billion to $ 6 billion of bonds maturing in June 2012-June 2013 on the following day.

The Central Bank bought 14.6 billion U.S. dollars in debt in two operations on 20 December, the most in a single day in the second round of quantitative easing.

"Yields are rising as the Federal Reserve has been the only buyer with the rest of the market on hold until the new year and pushed from the data that has been at best a weak team," said Paul Horrmann, a agent in New York Tradition Asiel Securities Inc., an interbank broker. "The money is coming out of bond funds, and that feeling, along with the offer, will drive higher returns at the end of the year."

Bond mutual funds had the largest customer of the recall of more than two years last week. the U.S. bond funds experienced the withdrawal of 8.62 billion U.S. dollars in the seven days ended Dec. 15, compared with $ 1,660,000,000 the week before, according to the Investment Company Institute, a trade group based in Washington.