MW: U.S. Treasurys drift up as Spain fears rekindled
By Laura Mandaro, MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. Treasurys edged higher Monday, pushing yields down, as a rise in Spanish bond yields over 7% showed investors newly wary about Europe’s debt problems.
Yields on the 10-year Treasury note 10_YEAR -1.93% , which move inversely to prices, were down 2 basis points at 1.54%. Yields on the 2-year note 2_YEAR -1.44% were off 1 basis point at 0.27%. A basis point is 1/100th of a percentage point.
U.S. debt yields have been drifting down since the start of the second quarter as investors have fled to assets considered safe havens, including U.S. government debt, on worries about Greece possibly leaving the euro zone and Spain’s ability to finance its debt.
On Monday, Spanish 10-year bond yields rose over 7%, a level considered unsustainable, and recently traded up 10 basis points at 6.98%, according to FactSet. Reports that the Spanish region of Valencia has warned it could go into default weighed on Spanish debt, putting more pressure on euro-zone finance ministers meeting in Brussels Monday to hammer out details of a plan to support Spain’s banking system. Read more on Spanish debt.
Ten-year yields fell about 11 basis points last week, the second straight week of declines. On Thursday and Friday, Treasurys gained, lowering yields, after investors deemed European Central Bank efforts to jumpstart the economy as too light for the region’s problems, and after Friday’s U.S. jobs report showed another month of sub-100,000 payrolls gains. Read more on Friday's bond report.
