MW: Treasurys hold gains after U.S. data, Spain worries
By Deborah Levine, MarketWatch
NEW YORK (MarketWatch) — Treasury prices held the bulk of their gains Wednesday, pushing 10-year yields down from the lowest in seven months, after a U.S. report showed consumer prices rose 0.1% last month.
Bond investors also keyed on a warning from Moody’s Investors Service about its rating on Spain that weighed on stocks and commodities. Read more on the rating agency’s move to put Spain under review for possible downgrade
Yields on 10-year Treasury notes (UST10Y 3.43, -0.05, -1.35%) , which move inversely to prices, fell 7 basis points to 3.43%. A basis point is 0.01%.
Yields on 2-year notes (UST2YR 0.64, -0.01, -1.23%) declined 3 basis points to 0.63%.
Thirty-year bond yields (UST30Y 4.52, +0.00, +0.04%) fell 4 basis points to 4.51%.
On Tuesday, yields on the benchmark securities touched the highest since May after the Federal Reserve ended its last policy meeting of the year by standing pat with the size of its bond-purchase program and by holding interest rates steady at ultra-low levels.
Yields briefly touched 3.50% during Asian trading hours “before buying emerged from bottom fishers as the European trauma has reemerged in Spain and Austria,” said John Spinello, Treasury bond strategist at Jefferies & Co.
Also Wednesday, the Federal Reserve Bank of New York’s index of manufacturing in the region rose to 10.6 in December, recovering from a negative November reading. Read more about the Empire State survey.
Later in the session, the Fed will resume its program of Treasury purchases and buy about $6 billion to $8 billion in debt maturing from 2014 to 2016.
