BLBG:Treasuries Decline On Concern Low Yields To Reduce Demand
Treasuries declined for a second day on concern a slide in yields to record lows will erode demand as investors prepared to bid at the last of three U.S. note auctions being held this week.
Longer maturities led losses after European Central Bank President Mario Draghi said the ECB is ready to do whatever it takes to preserve the euro. Daiwa SB Investments Ltd. and Hontai Life Insurance Co. both say Treasuries have become too expensive. The U.S. is scheduled to sell $29 billion of seven- year notes today. Thirty-year bond yields fell to an all-time low in earlier trading.
“When we get these big supply events, investors try to squeeze a bit more yield out of them,” said John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London. “It’s a bit of ebb and flow at the moment between safe havens and riskier assets. Treasuries’ prices fell yesterday and we’ve held that today.”
The benchmark 10-year yield rose three basis points, or 0.03 percentage point, to 1.43 percent at 6:40 a.m. New York time, according to Bloomberg Bond Trader prices. The 1.75 percent note due in May 2022 fell 1/4, or $2.50 per $1,000 face amount, to 102 30/32. The yield dropped to an all-time low of 1.379 percent yesterday.
The 30-year yield climbed three basis points to 2.48 percent, after declining to 2.4405 percent, the lowest level since Bloomberg started tracking the securities in 1977.
To contact the reporters on this story: David Goodman in London at dgoodman28@bloomberg.net; Wes Goodman in Singapore at wgoodman@bloomberg.net
To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net
