US bonds edge up on caution over Greece

TOKYO : Treasury prices rose in Asia on Friday, as investors looked beyond Greece 's initial success in securing a re
10 Feb, 2012

While Greece's leaders agreed on an austerity plan in order to secure further bailout funds to avoid a default, the country's lenders are seeking a parliamentary seal of approval before providing any aid.

"There was progress on Greece's situation, but the outlook is still unclear," says Hiroki Shimazu, senior market economist at SMBC Nikko Securities.

The 10-year Treasury yield fell to 2.01 percent, compared to 2.05 percent in US trading on Thursday.

The yield on 30-year Treasuries eased to 3.16 percent from 3.19 percent in US trading, when it rose to its highest level since mid-November.

The US Treasury sold $16 billion in 30-year bonds on Thursday as part of this week's $72 billion quarterly refunding. The high yield was 3.24 percent, with 98.13 percent of bids awarded at the high.

In addition to initial optimism over the Greek deal, an unexpected fall in US jobless claims also lessened the appeal of fixed-income assets overnight, and added to speculation that the US Federal Reserve will forego further stimulus steps as the economy improves faster than expected.

Initial claims for state jobless benefits dropped 15,000 to 358,000, the Labour Department said. The four-week average of new filings hit its lowest level since April 2008.

Copyright Reuters, 2012

 

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