By Joseph Adinolfi, MarketWatch
10-year bund yield falls to all-time low
NEW YORK (MarketWatch)--Treasury yields rose Thursday after
gauges of inflation and business investment in the U.S. came in
stronger than expected.
The yield on the 10-year note was up 2.1 basis point to 1.988%
in recent trade. Earlier in the trading session, it had fallen as
low as 1.932%, its lowest intraday level in two weeks, according to
Tradeweb data.The two-year yield was up 2.8 basis points to
0.638%.
U.S. durable-goods orders climbed a seasonally adjusted 2.8% in
January, beating the 0.5% growth consensus forecasts from a
MarketWatch poll of economists and suggesting that manufacturers
are preparing to increase production. The headline consumer-price
index contracted by 0.7% in January, its third decline in a row, in
line with the consensus forecast of economists polled by
MarketWatch.
But core CPI, which strips out volatile energy and food prices,
rose 0.2%, beating a consensus forecast for 0.1% growth.
Frenzied buying in Europe spilled over into the Treasury market,
lifting yields earlier in the session, according to David Keeble,
head of interest-rate strategy at Crédit Agricole.
In Europe, frenzied buying ahead of the European Central Bank's
first purchases of sovereign debt drove the German 10-year bund
yield to an all-time low of 0.285%, down 4.1 basis points on the
day.
Italian 10-year yields and the Spanish 10-year were down 12
basis points to 1.338% and 1.262%. The Portuguese 10-year yield was
down 14 basis points to 1.880%.
Tom di Galoma, head of rates and credit trading at ED & F
Man Capital Markets, said bond investors were loading up on
eurozone debt hoping that demand from the ECB will allow them to
sell quickly, and at a premium.
"European rates are not going up, and the ECB hasn't even
started buying yet," said Tom di Galoma, head of rates and credit
trading at ED & F Man Capital Markets. "People are just loading
the boat, hoping they'll get taken out at higher levels."
The ECB is expected to begin its first 60-billion euro purchase
of public- and private-debt after its March 6 meeting.
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