TREASURIES-U.S. bond prices rise on view on Fed, Europe worries reuters/article/2014/10/20/markets-usa-bonds-idUSL2N0SF1SY20141020 NEW YORK, Oct 20 (Reuters) - U.S. Treasuries prices rose on Monday on worries about Europes drag on the U.S. economy and more bets the Federal Reserve might not raise interest rates until late 2015. Safe-haven demand stemming from anxiety over the spreading of the Ebola virus and fighting in the Middle East have persisted to keep benchmark yields not far above 2 percent. Short-term interest rates futures implied traders do not expect the U.S. central bank to raise rates from its near zero percent until late 2015. Amid the volatile trading last week, a few top Fed officials suggested the U.S. central bank may want to consider prolonging its third round of quantitative easing in a bid to support the domestic economy. Those comments surprised the market as the consensus view has been the Fed would decide to wrap up its bond purchases for QE3 at its Oct 28-29 policy meeting. Early Monday, Dallas Federal Reserve President Richard Fisher told CNBC television last weeks turbulent trading should not stop the Fed from ending QE3. In the meantime, German business software maker SAPs downgrade of its profit outlook, together with recent weak regional economic data, intensified anxiety about the resilience of the euro zones largest economy. This pushed European stock values lower and stoked early safety bids for low-risk U.S. government debt. Bond yields retraced from their earlier session lows as the three major Wall Street indexes turned higher, brushing off disappointing results from from IBM, a Dow component. Benchmark 10-year Treasuries yields were last up 5/32 in price with a yield of 2.178 percent, down 2 basis points from late on Friday. The 10-year yield fell to an earlier low of 2.160 percent. The Standard & Poors 500 index was up 0.6 percent in midafternoon U.S. trading, while the Dow Jones Industrial average was 0.1 percent lower. Earlier, the S&P and the Dow were down as much as 0.2 percent and 0.7 percent, respectively. The 10-year U.S. yield just posted five straight weeks of declines, matching a streak previously seen in late December into January, according to Reuters data. Last Wednesday the 10-year yield tumbled to a 16-month low of 1.865 percent as anxiety about global growth triggered a stampede of buying in Treasuries to exit short bets against them.
Posted on: Tue, 21 Oct 2014 12:01:53 +0000
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