The yield on the 10-year Treasury reaches 3 percent of European debt concern fades

Treasury yields rose above 10 years of 3 percent for the first time since July, easing concerns that the European debt crisis would spread and most reports showed U.S. economic recovery at full steam.

Public debt maturing in three years and older declined this week the Fed said the economy was strong in 10 of its 12 regions, such as recruitment of the improvement, expansion of manufacturing and provides stronger retail shopping season. A smaller increase than expected in November payrolls pushed bond yields lower than two years yesterday. Next week the Treasury Department to sell $ 66 billion in debt securities.

"Concerns about the situation in Europe has receded some and economic data has generally been positive, resulting in higher rates," Michael Pond, co-head of interest rate strategy in New York at Barclays Plc , one of the 18 primary dealers that trade with the Fed. "While the fundamentals have improved, there is still much uncertainty out there and the Federal Reserve is constantly buying, which limit the increase in performance."

yields ten-year note rose 14 basis points to 3.01 percent, according to market data BGCantor after touching 3.04 percent, the highest since July 28. The price of 2,625 per cent security due in November 2020 fell 1 4 / 32, or $ 11.25 per $ 10,000 face amount, to 96 23/32. The yield on the 30-year bond rose 11 basis points to 4.31 percent while two-year yields fell four basis points to 0.47 percent.

European Scene

Responsible for the European Central Bank policy meeting in Frankfurt on Dec. 2 kept the benchmark interest rate at a record low of 1 percent. ECB President Jean-Claude Trichet said the central bank to delay its withdrawal from the emergency liquidity measures to combat the "acute" market tensions.

Ireland on November 28 became the second country to take advantage of EU aid, after Greece, prompting a flight to quality amid speculation that the country's crisis, funding can be extended to Portugal and Spain. The rescue package worth € Ireland 85000000000 ($ 114,000,000,000).

The ECB buy government bonds Irish and Portuguese, December 02 and yesterday, according to at least four operators with knowledge of operations, reducing concern that the ECB will not act aggressively to resolve the crisis. The ECB also bought Greece's debt, said another person, who requested anonymity because the bids are confidential. Trichet said the purchase voucher program was underway.

Cloudy

"The timing of these purchases of bonds is perfectly informed," said Peter Chatwell, fixed income strategist at Credit Agricole Corporate & Investment Bank in London. "The ECB is buying a year-end market very illiquid. Your purchases are always going to move the market in a big way."

The increase in the weekly performance of Treasuries came even as U.S. employers added fewer jobs than economists expected in November and the unemployment rate unexpectedly rose.

Payrolls increased 39,000, less than the most pessimistic forecast of economists surveyed by us, after a revised gain of 172,000 last month, the Labor Department figures showed yesterday in Washington. The unemployment rate rose to 9.8 percent, the highest since April, while the hours worked and incomes stagnated.

The index of the Institute for Supply Management non-manufacturing, which covers about 90 percent of the economy, rose to 55 last month from 54.3 in October, according to the ISM report released yesterday. The index of pending home sales won a record 10 percent after falling 1.8 percent in September, the National Association of Realtors said on 02 December in Washington.

Economic News

"The market has seen a lot of good economic news lately and the jobs report was the first to break the trend of good economic data," said Kevin Flanagan, a Purchase, New York-based chief investment strategist at Morgan Stanley's fixed income Smith Barney.

Goldman Sachs Group Inc. raised its forecast for U.S. Gross domestic product growth next year to 2.7 percent from 2 percent. The U.S. economy will expand 3.6 percent in 2012, according to a Goldman Sachs report sent to clients on 1 December.

Fed officials on November 12 began a round of $ 600,000,000,000 second asset purchases to support the growth of the economy and reduce unemployment and prevent deflation.

The U.S. central bank bought 37.3 billion U.S. dollars in Treasury bonds during the week, according to the website of the New York Fed. Next week is planning four days of shopping.

Fed Lock

Bill Gross, manager of the largest bond fund in the world at Pacific Investment Management Co., said the Fed is unlikely to raise interest rates for several years with employment growing less than expected.

"The front of the curve is the strong part of the curve" with policy makers required to maintain its target rate from almost zero to sustain growth, Gross said yesterday in a radio interview. The difference between the two - and 10-year notes is known as the yield curve.

The extra yield investors pay to maintain a 10-year debt for two years was extended for a fourth straight day to 2.54 percentage points yesterday, the yield curve steepest since June.

The yield on the 10 years end the year at 2.64 percent, according to the median forecast in a us survey of 63 banks and securities firms, with recent estimates given more weight. The yield on the two years is expected to end 2010 at 0.5 percent.

sales of public debt next week includes $ 32 billion three-year notes on Dec. 7, $ 21 billion 10-year notes the next day and $ 13 billion of bonds at 30 years 9 December.