EG: U.S. 10-Year Treasury Yields Near Two-Week High Before Auction
By Anna Rascouet and Wes Goodman
Feb. 11 (Bloomberg) -- U.S. 10-year Treasury yields reached a two-week high as stocks rose, European leaders met to discuss an aid package for Greece and the government prepared to sell $16 billion of 30-year securities.
The yield on the benchmark government note was within a basis point of its highest since Jan. 19 after the government sold $25 billion of the securities yesterday. German and French officials are leading talks to help Greece tackle the European Union’s biggest budget deficit. The MSCI World Index of shares advanced for a third day, rising 0.5 percent.
“All eyes are on the Greek situation with the European meeting today,” said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate Investment Bank in London. “And the Treasury market won’t recover from the auction yesterday, because the long end is still waiting for the 30-year bond auction to get through today.”
The yield on the 10-year note slipped 1 basis point to 3.70 percent as of 9:09 a.m. in London, according to BG Cantor Market Data. The 3.375 percent security due in February 2020 climbed 2/32, or 63 cents per $1,000 face amount, to 99 11/32.
Treasuries slid yesterday as Federal Reserve Chairman Ben S. Bernanke said in prepared testimony that policy makers may raise the discount rate, charged on direct loans to commercial banks, “before long.”
‘Extended Period’
Bernanke repeated the Federal Open Market Committee’s statement that low interest rates are warranted “for an extended period.”
The Fed will lift its target for overnight lending between banks, now in a range of zero to 0.25 percent, to 0.5 percent in the third quarter, according to a Bloomberg survey of banks and securities companies.
German and French officials are working on options including loan guarantees for Greece. Investor concern over the nation’s budget deficit pushed the euro to an eight-month low on Feb. 5 and sent bond yields surging in the region.
Jobless claims fell to 465,000 in the seven days ended Feb. 6 from 480,000, according to a Bloomberg survey of economists before today’s Labor Department report. When the figure climbed from 472,000 in the previous report, Treasuries rallied the most in three weeks.
To contact the reporter on this story: Anna Rascouet in London at arascouet@bloomberg.net
