- Member Benefits
- Manage your personalised Watchlist.
- Set up an online Virtual Portfolio.
- Participate in Share Chat.
- See more trades and director dealings.
- Play the Fantasy Share Trading Game.
Share:
HomeShare PricesShare ChatFinance NewsSharecast NewsRegulatory NewsBlogsLive PricesShares BookshopFinance ToolsMembers
Latest Share Chat
Macroeconomic News
TREASURIES-Bonds slump on jobs data, new hopes on ECB move
Fri, 3rd Aug 2012 21:46
By Richard Leong
NEW YORK, Aug 3 (Reuters) - U.S. Treasuries prices fell on
Friday as be
a month after a better-than-expected domestic jobs report
spurred investors to reduce safe-haven holdings of U.S.
government debt.
Employers added 163,000 new U.S. jobs in July, the most in
five months and topping the 100,000 gain predicted by
economists. The figure should afford the Federal Reserve more
time to consider its options to help the economy, disappointing
traders who had bet the U.S. central bank was ready to embark
soon on a third round of quantitative easing.
'It's a little disappointment that there is no imminent QE3
or an inter-meeting move,' Gemma Wright-Casparius, principal
portfolio manager of the $43 billion Vanguard
Inflation-Protected Securities Fund in Malvern,
Pennsylvania, said of why Treasuries sold off.
Traders also pared bond holdings as they reconsidered
whether the European Central Bank would soon engage in more
monetary easing to help the debt-plagued region.
Markets had initially read comments by the European Central
Bank on Thursday as indicating that concrete action to tackle
the debt crisis was still uncertain. A day later, the
disappointment faded as traders reckoned the ECB is laying the
groundwork for a bold scheme to reduce the borrowing costs of
Spain, Italy and other shaky euro zone nations.
'For the market, it's at a glacial speed and the market is
frustrated by it, but they are still making some headway,' said
Richard Schlanger, portfolio manager at Pioneer Investments in
Boston.
On Friday, the two-year Spanish government debt yield tumbled 78 basis points to 4.16 percent, the lowest
since late May, while two-year Italian sovereign yield fell over 30 basis points to 3.20 percent, its lowest
since mid-May.
The drop in peripheral euro zone debt fed the initial
selling in Treasuries. Bond losses grew in reaction to the
payroll report and somewhat better-than-expected data on the
U.S. services sector from the Institute for Supply Management.
Benchmark 10-year Treasury notes were 25/32
lower in price at 101-21/32 for a yield of 1.565 percent, up 9
basis points from late on Thursday. The 10-year yield touched a
high of 1.592 percent, the highest level since July 6 and above
its 50-day moving average.
The 30-year bond was more than 2 points lower at
107-6/32, yielding 2.649 percent, up nearly 10 basis points on
the day. The 30-year yield was as high as 2.681 percent, its
highest in four weeks and above its 50-day moving average.
AUGUST REFUNDING
The back-to-back weekly increases in longer-dated yields,
however, bode favorably for next week's quarterly refunding in
which the federal government will sell a combined $72 billion in
coupon-bearing debt.
Last month, the Treasury Department held a series of coupon
debt sales that fetched record low yields. This made some
investors wary of buying these low-yielding securities at
auctions despite their safe-haven status.
'The market is providing us with some concession for next
week's auctions,' said Kevin Flanagan, chief fixed income
strategist at Morgan Stanley Smith Barney in Purchase, New York.
Moreover, a surprise uptick in the jobless rate to 8.3
percent undercut the July payroll rise, confirming the outlook
that Fed policy-makers will act before year-end with another
round of quantitative easing and/or other stimulus measures.
Eventual moves from the Fed would send Treasury yield lower,
boosting their appeal.
'They remain open to further accommodation. We continue to
have sub-par growth,' Vanguard's Wright-Casparius said.
(Additional reporting by Ellen Freilich; Editing by Leslie
Adler)
((richard.leong@thomsonreuters.com)(+1-646-303-6313, Reuters
Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net))
Keywords: MARKETS USA BONDS/
(-------------- MARKET SNAPSHOT AT 1613 EDT (2013 GMT) --------------------- Sept T-Bond 149-23/32 (-1-25/32) Sept 10-Year note 133-31/32 (-21/32) Change vs Current Nyk yield Three-month bills 0.08 (-0.01) 0.081 Six-month bills 0.135 (+0.00) 0.137 Two-year note 99-25/32 (-01/32) 0.240 Five-year note 99-06/32 (-09/32) 0.666 10-year note 101-21/32 (-27/32) 1.568 30-year bond 107-06/32 (-2-03/32) 2.649 DOLLAR SWAP SPREADS LAST Change U.S. 2-year dollar swap spread 20.50 (-0.25) U.S. 3-year dollar swap spread 19.75 (-1.25) U.S. 5-year dollar swap spread 21.25 (-0.75) U.S. 10-year dollar swap spread 14.75 (-0.75) U.S. 30-year dollar swap spread -20.00 (-1.50))
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Aug 3 (Reuters) - U.S. Treasuries prices fell on
Friday as be
nchmark yields flirted with their highest levels in
a month after a better-than-expected domestic jobs report
spurred investors to reduce safe-haven holdings of U.S.
government debt.
Employers added 163,000 new U.S. jobs in July, the most in
five months and topping the 100,000 gain predicted by
economists. The figure should afford the Federal Reserve more
time to consider its options to help the economy, disappointing
traders who had bet the U.S. central bank was ready to embark
soon on a third round of quantitative easing.
'It's a little disappointment that there is no imminent QE3
or an inter-meeting move,' Gemma Wright-Casparius, principal
portfolio manager of the $43 billion Vanguard
Inflation-Protected Securities Fund in Malvern,
Pennsylvania, said of why Treasuries sold off.
Traders also pared bond holdings as they reconsidered
whether the European Central Bank would soon engage in more
monetary easing to help the debt-plagued region.
Markets had initially read comments by the European Central
Bank on Thursday as indicating that concrete action to tackle
the debt crisis was still uncertain. A day later, the
disappointment faded as traders reckoned the ECB is laying the
groundwork for a bold scheme to reduce the borrowing costs of
Spain, Italy and other shaky euro zone nations.
'For the market, it's at a glacial speed and the market is
frustrated by it, but they are still making some headway,' said
Richard Schlanger, portfolio manager at Pioneer Investments in
Boston.
On Friday, the two-year Spanish government debt yield tumbled 78 basis points to 4.16 percent, the lowest
since late May, while two-year Italian sovereign yield fell over 30 basis points to 3.20 percent, its lowest
since mid-May.
The drop in peripheral euro zone debt fed the initial
selling in Treasuries. Bond losses grew in reaction to the
payroll report and somewhat better-than-expected data on the
U.S. services sector from the Institute for Supply Management.
Benchmark 10-year Treasury notes were 25/32
lower in price at 101-21/32 for a yield of 1.565 percent, up 9
basis points from late on Thursday. The 10-year yield touched a
high of 1.592 percent, the highest level since July 6 and above
its 50-day moving average.
The 30-year bond was more than 2 points lower at
107-6/32, yielding 2.649 percent, up nearly 10 basis points on
the day. The 30-year yield was as high as 2.681 percent, its
highest in four weeks and above its 50-day moving average.
AUGUST REFUNDING
The back-to-back weekly increases in longer-dated yields,
however, bode favorably for next week's quarterly refunding in
which the federal government will sell a combined $72 billion in
coupon-bearing debt.
Last month, the Treasury Department held a series of coupon
debt sales that fetched record low yields. This made some
investors wary of buying these low-yielding securities at
auctions despite their safe-haven status.
'The market is providing us with some concession for next
week's auctions,' said Kevin Flanagan, chief fixed income
strategist at Morgan Stanley Smith Barney in Purchase, New York.
Moreover, a surprise uptick in the jobless rate to 8.3
percent undercut the July payroll rise, confirming the outlook
that Fed policy-makers will act before year-end with another
round of quantitative easing and/or other stimulus measures.
Eventual moves from the Fed would send Treasury yield lower,
boosting their appeal.
'They remain open to further accommodation. We continue to
have sub-par growth,' Vanguard's Wright-Casparius said.
(Additional reporting by Ellen Freilich; Editing by Leslie
Adler)
((richard.leong@thomsonreuters.com)(+1-646-303-6313, Reuters
Messaging: richard.leong.thomsonreuters.com@thomsonreuters.net))
Keywords: MARKETS USA BONDS/
(-------------- MARKET SNAPSHOT AT 1613 EDT (2013 GMT) --------------------- Sept T-Bond 149-23/32 (-1-25/32) Sept 10-Year note 133-31/32 (-21/32) Change vs Current Nyk yield Three-month bills 0.08 (-0.01) 0.081 Six-month bills 0.135 (+0.00) 0.137 Two-year note 99-25/32 (-01/32) 0.240 Five-year note 99-06/32 (-09/32) 0.666 10-year note 101-21/32 (-27/32) 1.568 30-year bond 107-06/32 (-2-03/32) 2.649 DOLLAR SWAP SPREADS LAST Change U.S. 2-year dollar swap spread 20.50 (-0.25) U.S. 3-year dollar swap spread 19.75 (-1.25) U.S. 5-year dollar swap spread 21.25 (-0.75) U.S. 10-year dollar swap spread 14.75 (-0.75) U.S. 30-year dollar swap spread -20.00 (-1.50))
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
