Thursday, February 26, 2009

BOND REPORT: Treasurys Trade Down With Auction, Deficit In Focus

By Deborah Levine

Treasurys prices declined Thursday, sending yields higher for a fourth consecutive session, as the government got ready to sell $22 billion in 7-year notes, the last of three record-sized note auctions conducted this week.

Growing government-debt issuance is in sharp focus as President Barack Obama released his first budget amid plans to come to grips with a yawning federal deficit.

Short-term U.S. debt pared their declines, however, as a pair of economic reports indicated an even weaker-than-expected labor market and as well as declining orders for manufactured goods.

Ten-year note yields (UST10Y) rose 5 basis points, or 0.05%, to stand at 2.98% . Yields earlier had topped 3% for the first time since Feb. 9.

Two-year note yields (UST2YR) also increased, up 2 basis points to 1.11%.

Bond prices move inversely to their yields.

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