MW: Treasurys fall; hopes for Europe raise risk assets
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell Monday, pushing yields up, as investors moved out of perceived safe havens such as bonds and the dollar amid optimism that European leaders will make progress towards resolving the region’s sovereign debt crisis.
Yields on 10-year notes 10_YEAR +3.19% , which move inversely to prices, rose 4 basis points to 2.08%. A basis point is a hundredth of a percentage point.
Yields on 30-year bonds 30_YEAR +2.15% increased 5 basis points to 3.07%.
Two-year note yields 2_YEAR +4.65% inched up 1 basis point to 0.27%.
German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet in Paris on Monday to discuss joint proposals for a summit in Brussels Friday. Investors hope European Union leaders will agree a plan that will see closer fiscal integration among euro-zone nations.
“Positive momentum is in the air,” said George Goncalves, a bond strategist at Nomura Securities. “The focus will remain on the euro zone, especially with little significant economic data and no U.S Treasury auctions.”
The main U.S. economic report of the day will be a reading on the services sector from ISM. See story on economic data this week.
Last week, Treasury prices fell, pushing 10-year yields up by the most in five weeks. Reducing positions ahead of the weekend helped bond prices gain even after a report showed the U.S. unemployment rate unexpectedly fell in November. Read more on Treasurys, payrolls.
