Treasuries fell for a second day amid speculation governments in Europe may guarantee Greek bonds to make it easier for the European Central Bank to accept a default on the debt, damping U.S. bonds’ refuge appeal.
U.S. yields fluctuated earlier gains after Luxembourg Prime Minister Jean-Claude Juncker said a selective default for Greece was still a possibility. Initial jobless claims increased more than forecast last week. The Treasury will auction $13 billion of 10-year inflation-protected securities today and announce the sizes of three note sales due next week.
“The market is saying it’s optimistic a deal will get done,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC, a New York-based brokerage for institutional investors. “For today, we will be trading off of what’s going on in Europe.”
Yields on benchmark 10-year notes increased four basis points, or 0.04 percentage point, to 2.97 percent at 8:47 a.m. in New York, according to Bloomberg Bond Trader prices. The 3.125 percent securities maturing in May 2021 dropped 11/32, or $32.44 per $1,000 face amount, to 101 10/32.
Thirty-year bond yields rose five basis points to 4.29 percent.(Bloomberg)
