BLBG:Treasuries Hold Gains Before Home Sales Data, as European Concern Grows
Treasuries held yesterday’s biggest gain in seven weeks before an industry report that economists forecast will show U.S. pending home sales grew at a slower pace last month.
Benchmark 10-year yields were about a quarter percentage point away from the record low as Italy prepared to sell as much as 8.5 billion euros ($11 billion) of notes today. Treasuries have returned 9.6 percent this year, according to Bank of America Merrill Lynch data, as the European debt crisis led investors to seek the relative safety of U.S. securities. It is the biggest gain since 2008.
“U.S. Treasuries are a good place to be,” said Hideo Shimomura, who helps oversee the equivalent of $77 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest bank. “We are focused on the most liquid markets.”
U.S. 10-year yields were little changed at 1.93 percent as of 10:04 a.m. in Tokyo, according to Bloomberg Bond Trader prices. The 2 percent security maturing in November 2021 changed hands at 100 21/32.
The yield slid nine basis points, or 0.09 percentage point, yesterday, the most since Nov. 9. The record low was 1.67 percent set Sept. 23.
Pending sales of previously owned homes probably rose 1.5 percent in November from the previous month, according to the median estimate of economists surveyed by Bloomberg News before the National Association of Realtors releases the figure today. The gauge increased 10.4 percent in October.
Treasuries gained yesterday after the European Central Bank said its balance sheet soared to a record following last week’s lending to keep credit flowing in the region.
“There’s a certain amount of risk-off that’s going to stay in the market as Europe goes through its gyrations,” said Kevin Giddis, president of fixed-income capital markets at the brokerage firm Morgan Keegan Inc. in Memphis, Tennessee.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net
To contact the editor responsible for this story: Naoto Hosoda at nhosoda@bloomberg.net
