MW: Treasurys fall a third day on European auctions
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices declined Thursday, pushing 10-year yields to their highest level in a month, as attention remains focused on European debt after Spain and France finished relatively well-received auctions.
Yields on 10-year notes 10_YEAR +1.54% , which move inversely to prices, rose 6 basis points to 2.13%, touching the highest on a closing basis since late October. A basis point is one one-hundredth of a percentage point.
Thirty-year yields 30_YEAR +2.00% increased 8 basis points to 3.14%.
Yields on 2-year notes 2_YEAR +3.05% added 1 basis point to 0.27%.
Spain received bids for almost three times as much bonds as it sold, though at higher yields than the most recent comparable auctions. See more on Spain’s bond sales.
France sold bonds at a lower cost than their last sales, also with very strong demand from investors. Read about France’s bond sale.
“There was some good news in Europe though: both the French and Spanish bond auctions were successful and peripheral spreads have narrowed,” said analysts at Barclays Capital. “The question remains what the authorities can do about the problem.”
The continuing fall in Treasury prices and improvement in European debt followed a big step taken Wednesday by global central banks to ease strains in bank funding markets. Read about Treasury bonds, Fed swap lines.
Bonds stayed down after the U.S. Labor Department reported an unexpected increase in weekly jobless claims. See story on jobless claims.
“Though we’re always biased to see the cloud versus the silver lining, we’ll concede that Thanksgiving week probably has more of an impact so we don’t put much on the apparent weakness,” said David Ader, head of government bond strategy at CRT Capital Group. “Prices have been under pressure all morning.”
The Treasury market also took little direction from the ISM’s index on the manufacturing sector, which improved more than forecast in November.
Traders look at the employment component of the index, as well as the jobless claims number, as the last hints ahead of the government’s monthly nonfarm payrolls report on Friday, one of the most closely-watched indicators of the economic outlook.
