Skip navigation
logo
(AFX UK Focus) 2009-11-12 11:44
TREASURIES-Bond prices rise, 2-year yield hits 8-mth lows
Article layout: raw

LONDON, Nov 12 (Reuters) - U.S. Treasury prices rose in Europe on Thursday driving yields lower as the market played catch up to gains by its euro zone and UK peers after having been shut on Wednesday for Veterans Day.

  • THE TWO-YEAR TREASURY NOTE YIELD FELL TO AROUND 0.80 percent in Asia -- the lowest since April 1 -- before edging up to 0.82 percent, down about 1.2 basis points from late Tuesday.

  • GILTS RALLIED ON WEDNESDAY AFTER BANK OF ENGLAND GOVERNOR Mervyn King said the central bank has an open mind on the need to pump more newly printed money into the economy.

  • DECLINES IN U.S. STOCK INDEX FUTURES, which pointed to a subdued open for Wall Street, also added to demand for lower risk government bonds.

  • BUT GAINS WERE SEEN LIMITED FOR NOW AS THE MARKET BRACED for a $16 billion sale of 30-year bonds later in the session, the last of this week's record-sized $81 billion three-part Treasury refunding.

  • DEMAND FOR THREE-YEAR AND 10-YEAR NOTES AT AUCTIONS earlier this week had been strong.

    "The biggest event of the day for fixed income will be the 30-year bond auction in the U.S., given that the last one (in October) was the trigger for a notable sell-off in long rates," said Cagdas Aksu, analyst at Barclays Capital.

    Analysts at KBC were also cautious, saying: "We suspect supply will weigh on the longer end of the curve at least until the 30-year T-bond auction is off the table late today. A break above 118-28+ might brighten the outlook and open the way for a test of 119-29 (October 2 high) level."

  • AT 1101 GMT, THE BENCHMARK 10-YEAR NOTES yielded 3.448 percent, down 3.1 basis points from late Tuesday.

    The 10-year Treasury future, which was traded on Wednesday despite the absence of a cash market, slipped 4/32 in price to 118-29/32, having hit a five-week high on Wednesday.

  • APART FROM THE WEEKLY INITIAL JOBLESS CLAIMS DATA, THERE are no major U.S. economic reports due on Thursday.

    Analysts polled by Reuters expect the latest count of new weekly jobless claims to total 510,000 for the week ended Nov. 7, down from 512,000 a week earlier. (Reporting by Ian Chua; Editing by Ruth Pitchford) Keywords: MARKETS TREASURIES (ian.chua@thomsonreuters.com; +44 207 542 7348; Reuters Messaging: ian.chua.reuters.com@reuters.net)

    COPYRIGHT

    Copyright Thomson Reuters 2009. 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.

    		•
    Bonds, money
    Macroeconomic stories, OECD reports
    Futures
    Indicators
    Article layout: raw
    Jump back to site navigation