US Treasuries prices fell on Friday, marking the market's worst week in two months, as traders who have been rethinking the global interest rate outlook further bailed out of bullish bond bets. Traders brushed off mild misses on US data on manufacturing and construction spending.
Investors have pared their holdings of US government debt since mid-April, as heavy debt supply and diminished pessimism about Europe reduced the safe-haven allure of Treasuries, German Bunds and British gilts. "The fundamentals in Europe are turning and there may be an acknowledgement of that," said Jeffrey Rosenberg, chief investment strategist for fixed income at New York-based BlackRock, the world's biggest asset manager.
The yield on benchmark 10-year Treasury notes was up 7.5 basis points at 2.119 percent after hitting the highest in nearly seven weeks at 2.124 percent. The 10-year yield booked its biggest weekly rise since early March. The German 10-year Bund yield jumped nearly 21 basis points on the week, the biggest such move since June 2013, according to Reuters data.
Trading volume was light as major European markets were closed for the May Day holiday.
For the month of April, US Treasuries produced a total loss of 0.53 percent, following a 0.63 percent gain in March, an index compiled by Barclays showed. The selling in Treasuries has been mitigated by the absence of a deal between Greece and its creditors and the view the Federal Reserve will refrain from ending its near-zero interest policy until September at the earliest.
Investors and Fed policy-makers will be attuned to signs of an economic upturn after a measly 0.2 percent growth in the first quarter. The Institute for Supply Management said its monthly index on national factory activity was unchanged at 51.5 in April, matching the 22-month low set in March. Economists had forecast an April figure of 52.0.
The government said construction spending fell 0.6 percent in March to its lowest since September. Analysts had forecast a 0.5 percent rise. These soft readings were offset by University of Michigan's consumer sentiment index which ended April at 95.9, up from 93.0 in March. Car makers were reporting stronger April sales than March.
Comments
Comments are closed.