BLBG: Treasuries Set for Biggest Monthly Loss Among World's Bonds on Growth Data
Treasuries headed for the steepest monthly loss among the world’s major bond markets on prospects U.S. reports on housing and employment will add to signs that economic growth will gain momentum.
Global bonds dropped for a fourth month on speculation gross domestic product growth will increase worldwide in 2011, leading equities to outperform debt. The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the securities, widened to 2.28 percentage points from this year’s low of 1.47 percentage points in August.
“People had better wait to buy” Treasuries, said Tsutomu Komiya, who handles U.S. debt in Tokyo for Daiwa Asset Management Co., which oversees the equivalent of $105.8 billion and is part of Japan’s second-biggest brokerage. “We will see good economic numbers” in 2011.
U.S. 10-year notes yielded 3.35 percent as of 12:20 p.m. in Tokyo, according to BGCantor Market Data. The 2.625 percent security due November 2020 traded at a price of 93 30/32. The yield will climb to 3.6 percent by the end of March, Komiya said.
Treasuries due in more than a year handed investors a 2.1 percent loss in December, according to figures compiled by Bloomberg and the European Federation of Financial Analysts Societies. It is the worst performance of 26 sovereign indexes.
The index of pending home sales rose 0.8 percent in November after jumping a record 10 percent in October, economists surveyed by Bloomberg News forecast the National Association of Realtors will report today.
Other data may show initial jobless claims dropped last week, a separate survey showed before today’s data.
Treasuries gained yesterday after the government’s $29 billion auction of seven-year notes produced the highest demand from a group of investors including foreign central banks since June 2009.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.
To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.
