Treasuries Trail Stocks by Most Since January on Taper Outlook Treasuries have lagged behind stocks in July by the most since January on speculation the Federal Reserve will trim its bond-buying program this year and that it may comment on the path for its purchases after a meeting today. U.S. government securities fell 0.2 percent in July as of yesterday, headed for a third monthly loss, based on the Bloomberg U.S. Treasury Bond Index. (BUSY) Stocks in the MSCI All-Country World Index of shares returned 5 percent including reinvested dividends. The difference was the most since a gap of 5.6 percentage points in January. “Some kind of correction in the easing policy is inevitable,” said Park Sungjin, head of asset management in Seoul at Meritz Securities Co., which oversees $7 billion. Park said he set bets against 5- and 10-year Treasuries two months ago and still holds the positions. Benchmark U.S. 10-year yields fell one basis point, or 0.01 percentage point, to 2.60 percent as of 9:55 a.m. in Tokyo, Bloomberg Bond Trader data showed. The 1.75 percent note due in May 2023 rose 2/32, or 63 cents per $1,000 face amount, to 92 21/32. The Fed, which has been buying $45 billion of Treasuries and $40 billion of mortgage bonds each month to put downward pressure on borrowing costs, will probably start reducing the purchases in September, based on a Bloomberg News survey of economists. Treasury trading volume yesterday at ICAP Plc, the largest inter-dealer broker of U.S. government debt, was $208.9 billion, less than this month’s average of $270.7 billion. Volume has declined from June’s average of $446.2 billion a day.
Posted on: Wed, 31 Jul 2013 01:31:41 +0000
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