MW: Treasury yields end week near multi-month highs
By Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices rose on Friday, pulling benchmark yields down this week from their highest level in eight months, as long-term worries about steps Washington still needs to take and confidence in the Federal Reserve’s buying prevented a continuation of the prior week’s massive selloff.
Yields on 10-year notes 10_YEAR +1.00% , which move inversely to prices, rose 1 basis point to 1.91%. A basis point is one one-hundredth of a percentage point.
A week ago, the benchmark security’s yield ended at 1.92%, the highest since May -- and higher yields have also served to draw in buyers.
Yields on 30-year bonds 30_YEAR +0.29% were little changed at 3.09%.
Five-year yields 5_YEAR +1.25% added 1 basis point to 0.81%.
The U.S. government is expected to have to get through a contentious debate in coming months over budget cuts, that under pretty much all options imply a slowdown in spending that will weigh on growth prospects.
“We still believe that the fiscal coin-flip (resulting in a drag) and Fed buying keeps U.S. Treasurys bid,” said George Goncalves, a bond strategist at Nomura Securities.
Analysts noted comments from Minneapolis Fed President Narayana Kocherlakota. In a speech in Minneapolis, he said the central bank may not be providing enough accommodation given his outlook for prices and the job market. Read: Kocherlakota sees fed stimulus as ‘too tight.’
”Next week sees the doves speak and if Kocherlakota is deemed a bit of a hawk, talk like that surely should soothe concerns about the trajectory of Fed purchases,” said David Ader, head of government bond strategy at CRT Capital Group.
Minutes released last week from the Fed’s December meeting sparked concerns that more officials can see the central banks bond purchases ending at the end of 2013.
Deborah Levine is a MarketWatch reporter, based in San Francisco. Follow her on Twitter @dlevineMW.
