NEW YORK: US Treasuries prices mostly eased on Wednesday, with yields rising modestly ahead of key auctions of 10-year and 30-year US debt.
Some maturities were seeing yields rise for the first time since European central bankers early this week began massive bond-buying that boosts the relative value of American debt.
On Wednesday, euro zone bond yields fell as the European Central Bank bought government debt across the currency union at a rate matching its trillion-euro commitment over 1-1/2 years.
In contrast, yields on the benchmark 10-year note were last at 2.1368 percent, reflecting a price decline of 2/32, coming off a two-day price rally, according to Thomson Reuters data.
Treasury officials on Wednesday were scheduled to sell $21 billion of 10-year Treasury notes and to hold a $13 billion sale of 30-year bonds on Thursday.
"Yields are up from the last auction, there's increasing uncertainty about the global economy, and there's the rise in the value of the dollar.
So I think demand in the auction should be in pretty good shape," said Stan Shipley, bond strategist at Evercore ISI in New York. Investors expect rates to rise as the US Federal Reserve readies for interest-rate increases later this year.
The Fed meets next week, and may remove a phrase saying it plans on being "patient" with changes in policy as a precursor to shifting rates, possibly as soon as June.
Shorter-maturity Treasuries, which would be most affected by a Fed shift away from near-zero interest rates, were mostly off 1 or 2 basis points.
The three-year note last yielded 1.6248 percent on a price decline of 3/32.
"The short end of the curve - the two-year, the three-year, the five-year - is becoming more pensive about a sooner-than-expected rate hike," Stith said.
"There's a lot of volatility in the market and we expect that to continue until the Fed acts."
Heavy bond-buying in Europe, however, could continue to drive investors to the more favorable yields in US debt.
The 10-year note yields 193 basis points more than the benchmark 10-year German bund, one of many euro zone issues plumbing record lows because of the European Central Bank's 1.1 trillion euro bond-buying program, which began on Monday.
The 30-year was last up 7/32 and yielding 2.7073 percent after recouping losses and earlier yielding as much as 2.745 percent.
Comments
Comments are closed.