Rodney
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Treasuries Halt Five-Day Decline - 2007/05/18 20:21
Treasuries Halt Five-Day Decline as Higher Yields Spur Demand
U.S. Treasuries snapped a five-day decline on speculation 10-year yields at their highest in a month will lure some investors.
The yield on the benchmark 10-year securities climbed to 4.76 percent yesterday, a level seen only three times in the past three months. Two-year yields touched 4.78 percent today, the highest since February.
The yield on the benchmark 10-year note fell 1 basis point, or 0.01 percentage point, to 4.75 percent at 8:21 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The price of the 4.5 percent note due in May 2017 rose 1/32, or 31 cents per $1,000 face amount, to 98 1/32.
Treasuries remained higher after China, the second-largest foreign holder of Treasuries with $420.2 billion at the end of March, increased the amount its currency can appreciate. The move may erode China's trade surplus with the U.S., slowing its accumulation of dollars.
Yields, which move in the opposite direction to prices, rose yesterday in New York trading as signs of a strengthening in the economy reduced speculation the Federal Reserve will cut borrowing costs this year. The 10-year yield has gained 8 basis points this week, the most since the start of April.
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