Wednesday, 11 November 2015 01:03
NEW YORK: Longer-dated US Treasuries prices slipped on Tuesday with benchmark yields hovering at their highest in over three months as investors sold bonds to make room for a $ 24 billion auction of 10-year notes.
More corporate bond supply added downward pressure on Treasuries prices which have already been falling on growing expectations the Federal Reserve will raise interest rates for the first time in nearly a decade at its Dec. 15-16 meeting.
“Today is about supply and concession building. We are in a bearish rate environment,” said Aaron Kohli, interest rates strategist at BMO Capital Markets in New York.
Benchmark 10-year Treasuries notes were down 2/32 in price with a yield of 2.349 percent, up 1 basis point from late on Monday. It reached 2.377 percent on Monday, its highest intraday level since July 21, according to Reuters data.
Tuesday’s 10-year note sale at 1 p.m. (1800 GMT) followed a mediocre $ 24 billion three-year auction on Monday.
In the “when-issued” market, traders expect the upcoming 10-year issue, part of this week’s quarterly refunding, to sell at a yield of 2.338 percent, according to Tradeweb. This would be the highest yield at a 10-year auction since June.
The Treasury will complete the refunding with a $ 16 billion auction of 30-year bonds on Thursday.
The U.S. bond market will close on Wednesday for the Veterans Day holiday.
