BLBG:Treasuries Hold Gain on Speculation Durable Goods Orders Dropped
Treasuries held a gain from yesterday before a government report that economists said will show orders for U.S. durable goods dropped in October, underpinning demand for the safest assets.
Ten-year notes erased a decline as U.S. lawmakers prepare to return this week to discuss the so-called fiscal cliff of spending cuts and tax increases set to take effect in January. The Treasury is scheduled to sell $35 billion of two-year debt today, the first of three auctions this week for $99 billion. Federal Reserve Bank of Dallas President Richard W. Fisher said accommodative policies can’t be left in place forever.
“Until we have some breakthrough news on the fiscal cliff, I don’t see many reasons for Treasuries to move a lot lower,” said Piet Lammens, head of research at KBC Bank NV in Brussels.
The benchmark 10-year yield fell one basis point, or 0.01 percentage point, to 1.65 percent at 10:13 a.m. in London, according to Bloomberg Bond Trader prices. The 1.625 percent note due in November 2022 rose 3/32, or 94 cents per $1,000 face amount to 99 3/4.
Bookings for U.S. goods meant to last at least three years dropped 0.7 percent last month, according to the median forecast of 75 economists surveyed by Bloomberg News. That compares with a 9.8 percent increase in September. Other data today will show property values and consumer confidence increased, according to separate Bloomberg surveys.
The Fed could “pursue a different course” and announce “a limit as to how much we are going to acquire of treasuries and mortgage-backed securities, say up to a limit of X, up to a point where our balance sheet reaches that,” Fisher said in a speech today in Berlin. That could be done “perhaps at this next meeting, which would be my preference, but it is a group decision,” he said.
To contact the reporter on this story: Emma Charlton in London at echarlton1@bloomberg.net
To contact the editor responsible for this story: Paul Dobson at pdobson2@bloomberg.net
