By Deborah Levine, MarketWatch
SAN FRANCISCO (MarketWatch) — Treasury prices turned down Wednesday, pushing yields slightly higher, after a media report hinted at further evidence that the European Central Bank is considering a more currency-neutral purchase program for sovereign bonds.
Yields on 10-year notes 10_YEAR +1.14% , which move inversely to prices, rose 1 basis point to 1.59%.
A basis point is one one-hundredth of a percentage point.
Yields on 30-year bonds 30_YEAR +0.97% added 2 basis points to 2.70%.
Five-year-note yields 5_YEAR +1.29% jumped 3 basis points to 0.63%.
Bloomberg News reported the European Central Bank, at its meeting Thursday, plans to remove the same amount of money it spends from elsewhere in the system so the program doesn’t increase the money supply.
The article indicates “the ECB will continue in the [German] Bundesbank spirit of not printing money, but merely focusing on the transmission mechanism of monetary policy,” said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.
Also, the report said bond purchases would be tied to country’s meeting certain conditions, such as austerity targets.
“Initial details suggest the program might not prove to be the strong support needed for the struggling euro-zone members, particularly given the uncertainty associated with purchases implied by the conditionality,” analysts at CRT Capital Group wrote in emailed comments.
Bonds stayed down after a report showed growth in U.S. productivity was revised higher in the second quarter than economists surveyed by MarketWatch had expected. The quarterly growth rate of unit labor costs — a major component of inflation — rose at a slower pace than the Labor Department initially reported. Read about productivity.
Deborah Levine is a MarketWatch reporter, based in New York.
