By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices edged up Monday, pushing yields down slightly, in response to the lack of a political agreement in Greece to make reforms necessary to avoid default.
Yields on 10-year notes 10_YEAR -0.10% , which move inversely to prices, fell 1 basis point to 1.92%.
A basis point is one one-hundredth of a percentage point.
Five-year note yields 5_YEAR -0.26% slipped 1 basis point to 0.77%.
Thirty-year yields 30_YEAR +0.03% were little changed at 3.12%, after falling to 3.10% earlier.
In Greece, party leaders failed to agree on key austerity measures, including wage cuts, during weekend negotiations.
Leaders from the European Union, the International Monetary Fund and the European Central Bank, told Greece that without such reforms, it may not receive the second bailout of 130 billion euros ($170.6 billion) that was agreed to in principle last year. Without the aid, Greece is seen as certain to miss a March debt repayment, putting the country into outright default. See story on Greece.
Limiting gains, traders are preparing for the U.S. government’s quarterly refunding auctions, which will include sales of 10-year notes and 30-year bonds. See story on bond refunding.
“Treasurys are modestly higher, as discord among Greek coalition members over the terms of the second bailout raises the threat of default and has sent the euro and European stocks lower,” said bond strategists at RBS Securities. “We have a very quiet week of economic data up ahead and the market’s focus will be on the Treasury refunding auctions which begin tomorrow.”
Bond prices dropped on Friday, pushing benchmark 10-year yields up by the most since October, after the U.S. government said the economy added many more jobs in January than expected, boosting confidence that the economy continues to grow. Read about bond sell-off on Friday.
