MW: Treasurys yields reach highest since early December
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices fell on Monday, pushing 10-year yields towards their highest levels in almost seven weeks, as growing comfort with Greece’s ability to make a deal with its creditors soon reduced investors’ demand for the relative safety of U.S. bonds.
“The tug-of-war we call Europe looks to be making some progress with its debt crisis, which in turn, is prompting investors to seek higher yields elsewhere,” said Kevin Giddis, president of Morgan Keegan’s fixed income capital markets.
Yields on 10-year notes 10_YEAR +2.17% , which move inversely to prices, rose to 2.07% from 2.03%. A basis point is one one-hundredth of a percentage point. The security’s yield last closed higher than that on Dec. 6, according to FactSet Research.
Thirty-year-bond yields 30_YEAR +1.61% rose to 3.14% from 3.10% on Friday, near their highest levels since early November.
Two-year notes 2_YEAR +0.41% were little changed at 0.25%.
European stocks, U.S. equities and the euro EURUSD +1.24% rose on more optimism that Greece is close to announcing a deal with its creditors would be decided by Monday’s meeting of European finance ministers in Brussels. Such a deal would enable the country to reduce its debt burden and avoid defaulting on a March 20 bond repayment. Read more on European Stocks.
Markets had been hoping that a credit-swap deal would be completed by the time euro-zone finance ministers meet in Brussels Monday to discuss the Greek situation, budget rules and other plans to tackle the debt crisis.
“We won’t judge that this solves anything in the big frame of things, but clearly [it] is being taken as a calming influence now and so is on the margin a negative for Treasurys,” said David Ader and Ian Lyngen, bond strategists at CRT Capital Group, in a note.
The move continues a move higher in yields last week as worries about European countries’ ability to finance themselves faded.
