MW: Treasurys edge up; yields slip from 4-month high
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose slightly Wednesday, pushing yields down from their highest level in at least four months, as traders repositioned themselves after last week’s selloff.
Yields on 10-year notes 10_YEAR -1.40% , which move inversely to prices, fell 4 basis points to 2.33% — coming off their highest levels since late October and up from 2% two weeks ago.
A basis point is one one-hundredth of a percentage point.
Yields on 5-year notes 5_YEAR -3.17% fell 4 basis points to 1.16%, off their highest level since early August.
Thirty-year bond yields 30_YEAR -0.93% slipped 4 basis points to 3.41%, after touching their highest level since September earlier this week.
“The Treasury market continues to hold steady at the top of the recent yield range, failing to find the needed bearish impetus to challenge the 2.42% level in 10-year yields, but also unwilling to let the dip-buyers bring yields back closer to the 2.23% 200-day moving-average,” said Ian Lyngen, senior government-bond strategist at CRT Capital Group.
Ten-year yields have risen or ended near flat in the past 10 sessions, one of the longest runs since the mid-1980s, according to CRT.
Treasurys became oversold in recent days but yields may still push higher, said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.
“We remain of the view that the market is re-pricing to higher yields and bottom-fishing is a dangerous game in the midst of a fundamental re-pricing,” he said.
Treasurys held on to gains after a report showed sales of existing homes in the U.S. declined in February to a 4.59 million pace, a little lower than some analysts expected, but with upward revisions to January’s figures. See story on home sales.
Also, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner testified before Congress about the European sovereign-debt crisis. Both said that while progress has been made, more work needs to be done to fully resolve the region’s crisis. Read more on Bernanke, Geithner.
Bernanke’s prepared remarks were released late Tuesday and were “not a departure from the Fed’s known stance, so we’ll be eager to see if he adds any more color in the Q&A,” Lyngen said.
Also, the Federal Reserve is conducting a buyback under its program known as Operation Twist, which has tended to provide support for Treasury prices intraday.
