US Treasuries prices rose on Tuesday, with the 30-year bond and 10-year note each gaining a full point, as a partial ban by Germany on short-selling and a drop in the euro sparked fears that a new chapter could unfold in the European debt crisis.
Investors sought the safety of US Treasuries, saying they had concerns about the German government's reasons for banning naked short selling of certain stocks, euro-denominated government bonds and derivatives. Treasury yields hit session lows after the euro fell to a new four-year low against the dollar.
"This announcement by the German government has given the view to the market that perhaps there's another problem in Europe," said John Brady, a senior vice president at MF Global in Chicago. Brady noted that Greece's debt problems had been exposed only after a new government took office.
"If you can't sell a government bond short, then how is the market going to be deep and legitimate?" said Raymond Remy, head of US fixed income at Daiwa Securities in New York. "I think that is bad for any market, but it just puts a little spook everywhere."
The 30-year bond was up 1-8/32, its yield easing to 4.29 percent from 4.36 percent on Monday. The benchmark 10-year note was up 15/32 after briefly gaining a full point. Its yield, which moves inversely to price, eased to 3.43 percent from 3.49 percent late on Monday. Two-year notes were up 2/32 in price, yielding 0.77 percent. Five-year notes rose 11/32 in price, their yields easing to 2.13 percent from 2.21 percent on Monday.
Comments
Comments are closed.