Rising tensions in Egypt raise safe-haven interest
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose on Wednesday, pushing yields down, which traders attributed to news reports of growing tensions in Egypt, trumping U.S. economic data.
Yields on 10-year notes (UST10Y 3.42, -0.02, -0.58%) , which move inversely to prices, fell 4 basis points to 3.41%. A basis point is 0.01 percentage point.
Two-year yields (UST2YR 0.61, +0.01, +1.32%) rose 1 basis point to 0.62% after the data.
Yields on 30-year bonds stayed down, by 4 basis points to 4.58%.
Bond traders cited news reports that showed clashes between protestors in Cairo, after President Hosni Mubarak said he would not run in presidential elections after his term expires later this year.
“Looks to me like things are worsening there,” said Thomas di Galoma, head of U.S. fixed-income trading for Guggenheim Securities. “It could be bond-friendly.”
Bonds briefly pared gains, then recovered after ADP said U.S. private employers added 187,000 jobs last month, a little more than some analysts predicted. The data come two days before the Labor Department’s broader, more closely watched nonfarm-payrolls report. Read more on ADP jobs report.
The market didn’t really react to the report, and “perhaps that’s because it doesn’t quite know whether to believe it or because it’s not far from the consensus for nonfarm payrolls,” said strategists at CRT Capital Group.
Still to come are a bond buyback by the Federal Reserve and the Treasury Department’s announcement of how much in debt it will sell next week.
The Fed previously said it expects to buy $1.5 billion to $2.5 billion in 2021 to 2027 bonds.
