BLBG:Treasuries Decline Before $13 Billion Auction Of 30-Year Bonds
Treasuries fell, snapping an advance from yesterday, as the U.S. prepared to auction $13 billion of 30-year bonds today following sales of three- and 10-year debt in the past two days.
Benchmark U.S. government debt also halted gains on speculation 10-year yields that have declined half a percentage point in the past three months have lost their allure. Losses in Treasuries were limited before a government report forecast to show consumer prices fell last month, giving the Federal Reserve more scope to resume asset purchases.
“Investors may be taking a little breather from buying Treasuries,” said Masaru Hamasaki, chief strategist in Tokyo at Toyota Asset Management Co., which oversees the equivalent of $24 billion. “The flight-to-quality amid concern over the European debt crisis and U.S. slowdown has already sent bond prices to an expensive level.”
The 10-year yield climbed two basis points, or 0.02 percentage point, to 1.61 percent at 8:05 a.m. in London, according to Bloomberg Bond Trader prices. The yield dropped seven basis points yesterday. The 1.75 percent note due May 2022 fell 5/32, or $1.56 per $1,000 face amount, to 101 1/4.
The 30-year yield climbed two basis points to 2.73 percent.
The difference in yields between 10-year notes and Treasury Inflation Protected Securities, which represents traders’ expectations for inflation over the life of the debt, was 2.1 percentage points, down from their 2012 high of 2.45 percentage points on March 20.
To contact the reporters on this story: Monami Yui in Tokyo at myui1@bloomberg.net; David Goodman in London at dgoodman28@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
