AGL 38.20 Increased By ▲ 0.05 (0.13%)
AIRLINK 129.30 Increased By ▲ 4.23 (3.38%)
BOP 7.85 Increased By ▲ 1.00 (14.6%)
CNERGY 4.66 Increased By ▲ 0.21 (4.72%)
DCL 8.35 Increased By ▲ 0.44 (5.56%)
DFML 38.86 Increased By ▲ 1.52 (4.07%)
DGKC 82.20 Increased By ▲ 4.43 (5.7%)
FCCL 33.64 Increased By ▲ 3.06 (10.01%)
FFBL 75.75 Increased By ▲ 6.89 (10.01%)
FFL 12.83 Increased By ▲ 0.97 (8.18%)
HUBC 110.72 Increased By ▲ 6.22 (5.95%)
HUMNL 14.03 Increased By ▲ 0.54 (4%)
KEL 5.22 Increased By ▲ 0.57 (12.26%)
KOSM 7.69 Increased By ▲ 0.52 (7.25%)
MLCF 40.08 Increased By ▲ 3.64 (9.99%)
NBP 72.51 Increased By ▲ 6.59 (10%)
OGDC 189.18 Increased By ▲ 9.65 (5.38%)
PAEL 25.74 Increased By ▲ 1.31 (5.36%)
PIBTL 7.38 Increased By ▲ 0.23 (3.22%)
PPL 153.45 Increased By ▲ 9.75 (6.78%)
PRL 25.52 Increased By ▲ 1.20 (4.93%)
PTC 17.92 Increased By ▲ 1.52 (9.27%)
SEARL 82.50 Increased By ▲ 3.93 (5%)
TELE 7.63 Increased By ▲ 0.41 (5.68%)
TOMCL 32.50 Increased By ▲ 0.53 (1.66%)
TPLP 8.48 Increased By ▲ 0.35 (4.31%)
TREET 16.74 Increased By ▲ 0.61 (3.78%)
TRG 56.01 Increased By ▲ 1.35 (2.47%)
UNITY 28.85 Increased By ▲ 1.35 (4.91%)
WTL 1.34 Increased By ▲ 0.05 (3.88%)
BR100 10,659 Increased By 569.2 (5.64%)
BR30 31,331 Increased By 1822.5 (6.18%)
KSE100 99,269 Increased By 4695.1 (4.96%)
KSE30 31,032 Increased By 1587.6 (5.39%)

US Treasuries prices erased early gains on Friday as expectations that Spain would ask for help to recapitalize its banks over the weekend reduced fears over the euro zone breaking up and ebbed demand for the safe-haven debt. A late downgrade of Spain's credit rating by Fitch Ratings on Thursday sparked strong overnight demand for Treasuries, though demand ebbed during Friday's US session as investors looked ahead to the expected bailouts.
Traders are nervous that continuing instability in Spain, if not addressed in the near term, would reduce the likelihood that a pro-European party will succeed in elections scheduled in Greece on June 17 that may decide whether the country remains in the euro zone.
"The bonds come off the highs because this bailout will be done on the weekend. It has to be done on the weekend because it will have an impact on the outcome of the Greek election; they don't want to see instability in the week before," said Richard Gilhooly, an interest rate strategist at TD Securities in New York. Benchmark 10-year notes yields were last unchanged in price to yield 1.64 percent after trading as low as 1.56 percent.
Thirty-year bonds fell 15/32 in price to yield 2.76 percent, up from 2.65 percent. Two-year interest rate swap spreads, which are seen as a proxy for bank credit risk, also tightened by 0.75 basis point on the day to 30.75 basis points, the lowest level in around a month.
Investors were nonetheless cautious over the terms that will be attached to any Spanish bailout, with uncertainty over whether bank bond investors are likely to take large losses. Concerns that new stresses will emerge in the region are also expected to keep bond yields near their historic lows. The Treasury Department will sell $32 billion in new three-year notes and reopen a prior 10-year note issue by $21 billion and an older 30-year bond issue by $13 billion next week.

Copyright Reuters, 2012

Comments

Comments are closed.