MW: Treasurys fall on strong U.S. data, Fed concerns
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) -- Treasurys prices added to losses on Friday, pushing yields up, after a pair of government reports showed improvement in home sales business spending jumped, adding to evidence the economy is recovering and reducing the appeal of the relative safety of U.S. debt.
Treasurys were under pressure earlier though, which analyst attributed to media reports that more Federal Reserve officials would like to sell some of the government and mortgage-related assets it bought during the credit crisis.
Yields on 10-year Treasury notes (UST10Y 3.80, +0.03, +0.85%) , which move inversely to prices, rose 4 basis points to 3.82%. A basis point is 0.01%.
Yields on 2-year notes (UST2YR 1.05, +0.03, +3.13%) increased 3 basis points to 1.07%.
U.S. orders of durable goods dropped 1.3% in March, the Commerce Department said. Orders for core capital equipment goods -- the kinds of equipment businesses invest in to maintain or expand their productive capacity -- rose 4%, the largest increase since June. Read about durable-goods orders.
"Such a gain, which follows February's 2.1% jump, continues to suggest that businesses are reinvesting as the economy continue to turn," said Dan Greenhaus, chief economic strategist at Miller Tabak.
A separate report said sales of new homes, surged to a 411,000 pace last month. Economists surveyed by MarketWatch expected an improvement to a 335,000 pace. See more on new home sales.
The Fed's assets
Treasury prices were under pressure earlier after reports that indicated at least six members of the policy-setting board favor selling assets to reduce the Fed's bloated balance sheet, according to news outlets citing CNBC.
Analysts indicate near-term sales are unlikely.
The "headlines are getting attention this morning and weighing on the Treasury market," said strategists at CRT Capital Group.
They note that markets know that some Fed officials favor near-term asset sales, and have said so publicly. But Fed Chairman Ben Bernanke "and the balance of the voters are opposed to the concept, so we're cautious of making too much from the CNBC chatter," they said.
The Federal Open Market Committee meets next week, and is expected to keep interest rates steady at a range of zero or 0.25%.
Also weighing on demand for Treasury debt, Greece formally requested a financial assistance package from the European Union and the International Monetary Fund after its borrowing costs soared,