Treasury bonds rise in thin trading | VailDaily.com
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Treasury bonds rise in thin trading

NEW YORK – Treasury prices drifted higher Friday in very light volume, with U.S. trading desks thinly staffed the day after the Thanksgiving holiday.The modest rally helped the U.S. government bond market post its third straight week of gains. The 4.43 percent yield on the benchmark 10-year note – which moves in the opposite direction of its price – is a quarter-point off highs seen earlier this month.With no new U.S. economic reports to influence trade this session, traders looked overseas – Treasurys moved in sympathy with European bonds, said Ward McCarthy, managing director at Stone & McCarthy Research Associates in Princeton, N.J.German bunds got a surprise boost from a softer-than-expected Ifo November business-climate survey and weak consumer-price data, which some investors took as a sign that euro-zone inflation pressures may have peaked.But the news wasn’t enough to send U.S. bond prices dramatically higher during the holiday-shortened session.”Anyone who missed today shouldn’t worry – they didn’t miss a whole lot,” McCarthy said.The Bond Market Association recommended an early U.S. bond market close at 2 p.m. EST.Around 2 p.m. EST, the 10-year Treasury note was up 11/32 to yield 4.43 percent, down from 4.47 percent Wednesday. The 30-year Treasury was up 22/32 to yield 4.66 percent, down from 4.70 percent.The new two-year note, in its first day of trade since being auctioned Wednesday, yielded 4.32 percent.Analysts attribute the recent strength in U.S. government-securities prices to the failure of yields earlier this month to reach new highs for the year, dashing the hopes of many bearish investors and causing them to buy Treasurys to cover their positions.But with minutes from the Federal Reserve’s last policy meeting suggesting that policy-makers will be relying more heavily on economic data when deciding whether to keep raising rates, economic fundamentals are likely to play a more prominent role in the bond market’s near-term direction.There are lots of key releases due next week, including October housing market data, November national manufacturing, November employment, third-quarter gross domestic product, and the Fed’s favored inflation gauge – core personal consumption expenditures prices – for October.None of the reports is expected to show pronounced economic weakness.Yields on three-month Treasury bills were 3.96 percent, as the discount rose 0.01 percentage point to 3.96 percent.


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