Treasuries higher

US Treasuries prices climbed on Friday as unrest in Egypt and stock losses fed demand for safe-haven US government debt. US stocks fell from 29-month highs as investors turned away from riskier assets as Egyptian President Hosni Mubarak sent troops and armoured cars into cities in an effort to quell mass protests demanding he step down.
The stock market's inability to hold a bid after the US government released a fairly upbeat report on fourth-quarter growth helped fuel the rise in Treasuries, along with the unrest in Egypt, said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford Connecticut. Stocks were trading over 1.4 percent lower in the late afternoon.
Benchmark 10-year Treasuries, down early in the session, traded 15/32 higher, with their yields easing to 3.34 percent from 3.38 percent late Thursday. Month-end buying of Treasuries by portfolio managers who need longer-dated Treasuries to match their duration benchmarks contributed to the upward move in prices.
So did the Federal Reserve's purchases of $8.36 billion in Treasuries maturing from February 15, 2018, to August 15, 2020. "The Federal Reserve is buying in size alongside retail and there are no Treasury auctions next week," Rupkey said. Trade volumes were above average through the yield curve, with maturities ranging from bills through 3.5-year notes comprising the busiest part of trade, according to data from Tradeweb.
Regional brokers and banks traded more volume than average, while asset managers and government organisations made up less volume than average, Tradeweb said. The government said the US economy gathered speed in the fourth quarter, aided by growth in exports and the biggest consumer spending gain in more than four years. While the government's report on US fourth-quarter economic growth got an initially positive reaction from equities and a negative response from bonds, the report really was "nothing to write home about," Rupkey said. In addition, "Real money likes buying on dips," Rupkey said. "They bought when the 10-year yield moved above 3.4 percent because the charts look good," he said.