from Bloomberg:
Treasuries rose for the first time in a week on speculation the U.S. economy won’t recover soon enough to keep yields at the highest level in six months.
Ten-year notes gained after falling the most since January yesterday, narrowing the difference between two- and 10-year yields to 2.73 percentage points from 2.76 percentage points. The gap widened to a record yesterday on speculation surging sales of U.S. debt will overwhelm the Federal Reserve’s efforts to keep borrowing costs low.
“I don’t think this level is reasonable” for Treasury yields, said Yasutoshi Nagai, chief economist in Tokyo at Daiwa Securities SMBC Co., part of Japan’s second-largest brokerage. “The main economic data continue to deteriorate.”
The yield on the benchmark 10-year note fell two basis points to 3.72 percent as of 9:32 a.m. in Tokyo, according to data compiled by Bloomberg. The price of the 3.125 percent security due in May 2019 rose 5/32, or $1.56 per $1,000 face amount, to 95 3/32.
Yields increased 19 basis points yesterday, the most since Jan. 19. A basis point is 0.01 percentage point.
Treasuries tumbled yesterday on concern record supply will overwhelm investor demand as the U.S. economy begins to show signs of stability.
The U.S. will likely sell $3.25 trillion of Treasuries in the fiscal year ending Sept. 30 to fund bank bailouts, stimulus spending and a record budget deficit, according to Goldman Sachs Group Inc., one of the 16 primary dealers required to bid at government debt sales.
