By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices slipped Monday, nudging yields up from record lows, as traders derived little new information from the ratings watch put on several European countries, nor from China and Europe manufacturing data.
Coming up, the Treasury Department will sell 2-year notes 2_YEAR +7.34% in the first of three auctions this week.
Yields on 10-year notes 10_YEAR +2.59% , which move inversely to prices, rose 1 basis point to 1.45%, after touching a record low in the previous session.
A basis point is one one-hundredth of a percentage point.
Yields on 30-year bonds 30_YEAR +1.64% added 2 basis points to 2.53%, after also hitting an all-time low Monday.
Yields on 5-year debt 5_YEAR +3.37% increased 2 basis point to 0.58%.
The government will auction $35 billion in 2-year notes 2_YEAR +7.34% at 1 p.m. Eastern time. See recent Treasury auction results.
The securities yield 0.23%, little changed on the day and down from 0.31% at last month’s auction.
“The current record low is 22.2 basis points from August last year, during the midst of the U.S. downgrade chaos and surge in the Swiss franc as the [Federal Reserve] pledged to hold rate at zero for several years,” said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.
And for foreign investors, or U.S. investors who buy overseas government debt, that yield on the maturity is actually pretty high relative to other countries considered safe.
With the 2-year German shatz DE:2YR_GER 25.02% yielding negative 0.06%, 2-year debt from the Netherlands at 0.03% and a rate of 0.10% on 2-year Japanese government bonds, U.S. 2-year notes, ”with a firming dollar, don’t look half bad,” David Ader and Ian Lyngen, bond strategists at CRT Capital Group, wrote in a note.
The U.S. will auction 5-year notes Wednesday and 7-year notes 7_YEAR +3.50% the following day.
Late Monday, Moody’s Investors Service cut the outlook on Germany’s triple-A rating to negative from stable and lowered its outlook on other northern European countries.
That was followed by positive economic data out of China, where a preliminary reading of HSBC’s manufacturing purchasing-managers index for July was at its strongest level since February. Read full story on China’s PMI.
Markit’s euro-zone PMI was unchanged for July, showing activity continued to shrink. See more on euro zone PMI.
Deborah Levine is a MarketWatch reporter, based in New York.
