* Fed buys $10 bln in bonds via two operations
* Contagion worries in Europe adds safety bids for bonds
* Some caution emerges in advance of Friday's jobs data
(Updates market action, adds quotes, changes byline)
NEW YORK, Nov 29 (Reuters) - U.S. Treasury prices rose on Monday prompted by Federal Reserve's bond purchases and safety bids stemming from anxiety over fiscal problems spreading across Europe.
Short-covering and month-end portfolio purchases added to the market's gains in the absence of major economic data.
Benchmark U.S. government debt fared also better than Bunds as investors feared more sovereign troubles across the Atlantic and its rising toll on stronger European nations like Germany to bail out their neighbors, analysts said.
The European Union's approval of an 85 billion euro ($115 billion) rescue package for Ireland on Sunday failed to quell jitters that other debt-stricken countries like Spain and Portugal may need emergency aid too. See [ID:nLDE6AR0M6]
"The European debt crisis is adding more problems down the road," said Andrew Richman, fixed income strategist at SunTrust Private Wealth Management in Palm Beach, Florida.
Some uncertainties over Friday's payroll report restrained the day's market gains on risks that the government may show bigger-than-expected job growth in November, signaling an earlier pickup in growth and inflation down the road.
"The tone of the U.S. economic data has perked up," said Nic Pifer, a portfolio manager at Columbia Management in Minneapolis. "That has worked against a Treasury rally."
Long-dated Treasuries were the best performing issues, flattening the yield curve for a third straight session.
The 30-year cash bond US30YT=RR garnered an afternoon bout of shortcovering when its price touched chart resistance in the 101-15/32 area. It finished near 101-18/32 for a yield of 4.16 percent, down nearly 6 basis points from Friday.
The yield spread between 30-year and 10-year Treasuries narrowed to 1.32 percentage points, the smallest margin since early October.
Benchmark 10-year notes US10YT=RR rose 10/32 to yield 2.83 percent, down from 2.87 percent late Friday. The 10-year yield flirted with the 3 percent mark two weeks earlier.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.
No comments:
Post a Comment