By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices rose on Friday, pushing yields lower, with investors’ desire for safety in the wake of turmoil in Egypt supporting what is traditionally considered the safest place in the world to store money.
Also, bond traders digested the aftermath of the week’s auctions of U.S. government debt, although a Federal Reserve buyback is yet to come.
Yields on 10-year notes (UST10Y 3.65, -0.06, -1.49%) , which move inversely to prices, fell 5 basis points to 3.65%. A basis point is one one-hundredth of a percent.
Yields on 2-year notes (UST2YR 0.81, -0.02, -2.75%) declined 3 basis points to 0.81%.
Thirty-year bond yields (UST30Y 4.72, -0.04, -0.84%) fell 5 basis points to 4.72%.
Late Thursday, Egyptian President Hosni Mubarak surprised many observers in the financial markets as he refused to step down immediately and vowed to reject foreign pressure, stoking the ire of protesters gathered in central Cairo.
“Talk of Egypt getting messy over the weekend is holding in Treasurys as the risk-off trade dominates,” said Thomas di Galoma, head of U.S. fixed-income trading for Guggenheim Securities.
Treasurys remained higher after a government report showed the U.S. trade gap widened by 5.9% in December to $40.6 billion, close to what analysts expected. Read more on U.S. trade deficit.
Still to come is a report on consumer confidence for this month.
Earlier this week, yields on benchmark securities touched the highest level since last spring, as investors became more convinced that the U.S. economy is improving. However, yields then came off those levels, which analysts attributed to investors who still find U.S. debt a good investment with a higher yield, capping the sell-off. See more on Treasury trading.
