NEW YORK: US 30-year Treasuries bond prices fell on Wednesday, prompted by worries that the Federal Reserve possibly had a stronger conviction in raising interest rates in the record of its April policy meeting than previously thought.
Other Treasuries maturities were steady to slightly higher in prices ahead of the scheduled 2 p.m. (1800 GMT) release of the Federal Open Market Committee's April 28-29 policy meeting.
"The April FOMC minutes might have a hawkish tone," said Todd Colvin, senior vice president at Ambrosino Brothers in Chicago.
That view emerged even though a spate of US data signaled a meek rebound following a likely economic contraction in the first quarter.
The 30-year bond has also been under selling pressure on competition from higher-yielding corporate bond supply and speculation a few large investors exiting from earlier curve flattening trades.
Companies raised $38 billion in the bond market on Monday and Tuesday, according to IFR, a Thomson Reuters unit.
Analysts anticipate a tapering in corporate bond supply in advance of the May 23-25 US Memorial Day weekend.
The 30-year bond was down 13/32 in price, yielding 3.060 percent, up 2 basis points from Tuesday but still below the 5-1/2 month peak of 3.128 percent seen last week.
Benchmark 10-year Treasuries was little changed in price with a yield of 2.262 percent.
Prices for US government debt, which had fallen during the past two sessions, rose earlier in step with the European bond market, which was spurred by the European Central Bank's plan to accelerate its bond purchases in May and June, traders said.
Concerns about Greece's ability to meet its debt payments briefly renewed safe-haven demand for Treasuries.
Nikos Filis, a parliamentary speaker for Greece's ruling leftist Syriza party told Greek television the cash-strapped government will be unable to make its debt payment to the International Monetary Fund due on June 5 without a deal with the country's creditors.
Filis' statement stoked jitters that Greece is at risk of default, a scenario that could ripple across financial markets.
Traders were pinning hopes for further retracement in yields from the recent bond market sell-off on month-end portfolio buying.
The duration of Barclays' widely followed Treasuries market index is expected to extend by 0.13 year in June, a bit more than average. That means fund managers who benchmark their bond portfolios to the Barclays index would add longer-dated Treasuries to conform with the expected duration extension.
Comments
Comments are closed.