By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices edged up Wednesday, pushing long-term yields down for the first day in five, ahead of a report on U.S. existing home sales and the government’s auction of 5-year notes.
Yields on 10-year notes 10_YEAR -0.68% , which move inversely to prices, fell 1 basis point to 2.06%, after trading near the highest level in a month in the prior session. A basis point is one-hundredth of a percentage point.
Thirty-year yields 30_YEAR -0.72% slipped 2 basis point to 3.20%, near their highest level since October.
Five-year yields 5_YEAR -0.88% declined 1 basis point to 0.91%, off their highest level since late December.
“A sense of caution continues to pervade European markets ever since the Greek deal,” said Bill O’Donnell, head of Treasury strategy at RBS Securities, referring to European ministers’ agreement to extend a second bailout to debt-strapped Greece announced late Monday.
“Markets,” he said, “are also asking the next obvious question about Portugal and Ireland” — nations that previously took bailout funds and may now ask for more favorable terms.
Treasury bonds have sold off recently as stocks gained thanks to optimism about a deal for Greece as well as fading worries the country could default on its debt. The Dow Jones Industrial Average DJIA +0.12% on Tuesday touched the 13,000 level for the first time on an intraday basis since May 2008.
Having U.S. stock markets near key highs “may argue for a pause in the recent rise in Treasury yields,” O’Donnell said.
At 1 p.m. Eastern time, the Treasury Department will sell $35 billion in 5-year notes, the second of three note auctions this week.
On Tuesday, the government received modest demand for its sale of 2-year notes. Read about 2-year note auction.
