Fed conducting pair of buybacks during Monday’s session
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose Monday, pushing their yields lower, as worries about sovereign debt in Europe and military tensions between North Korea and South Korea make the relative investment security of U.S. debt more attractive.
The only scheduled events on the calendar are two Federal Reserve buybacks.
Yields on 10-year notes (UST10Y 3.28, -0.06, -1.80%) , which move inversely to prices, fell 6 basis points to 3.27%. A basis point is one one-hundredth of a percentage point.
Yields on 2-year notes (UST2YR 0.59, -0.02, -2.63%) declined 2 basis points to 0.59%.
Thirty-year bond yields (UST30Y 4.39, -0.05, -1.10%) fell 5 basis points to 4.39%.
Analysts notes that trading volumes are expected to dwindle this week, which could exaggerate moves in the Treasurys market.
“Strap in: markets are thin, desks are starting to get lightly staffed, and news and flows will push the market around much more than usual,” said strategists at RBS Securities.
Strategists noted a Bloomberg News article focusing on France’s AAA rating and what the cost of insuring the nation’s debt infers about its rating.
To close out last week, Treasurys ended little changed after 10-year yields reached the highest seen since May on Thursday, which analysts attributed to changing positions by traders as year-end approaches and adjusting for key technical levels being broken. Read about Treasury market.
Also lending support to the market, the Fed will be conducting five buybacks while the Treasury has no note or bond auctions scheduled.
The Fed will buy $7 billion to $9 billion in 2018 to 2020 bonds in a morning buyback, and another $6 billion to $8 billion in 2014 to 2016 debt during an afternoon operation. See Fed’s buyback schedule.
