Longer maturity bonds rise before anticipated manufacturing report
By Sara Sjølin, MarketWatch
NEW YORK (MarketWatch) — Treasurys edged between minor gains and losses Friday, stabilizing a bit after 10-year notes finished their worst losing streak in six months and ahead of a closely anticipated manufacturing report.
Yields on the 10-year note 10_YEAR +1.20% were less than 1 basis point higher at 3.17%. Yields on the 30-year bond 30_YEAR +0.78% were flat at 4.38%. Two-year note yields 2_YEAR +4.22% were less than 1 basis point higher at 0.47%.
On Thursday, 10-year notes ended a four-session loss streak that lifted yields 29 basis points. The sell-off was largely about relief as Greece drew closer to staving off an immediate default, analysts said.
“Our view is that the backup is entirely about unwinding that event risk,” said analysts at CRT Capital Group in a note.
Further Greek relief is under way as a Bloomberg report said Friday that Greece may get as much as 85 billion euros, or $124 billion, in new financing in a second bailout to prevent default and end the euro-zone’s debt crisis.
Thursday, bonds came under pressure as the Chicago PMI, a Chicago-area manufacturing gauge, rose to a 61.1 reading from a 56.6 level in May. Later Friday a broader, national manufacturing index from the Institute for Supply Management will be released. Bonds are often sought as a safe-haven against economic downturns and uncertainty, and are vulnerable if economic data comes out stronger than expected.
On Thursday, Treasury prices declined, pushing yields up for a fourth straight day, as the Federal Reserve ended QE2 and bought back $4.91 billion in Treasury debt.
