Monday, December 22, 2008

BOND REPORT: Treasurys Curb Losses On Auto Bailout, Yields Rise

By Laura Mandaro

Treasurys pared their losses in early afternoon trade Friday after some of the euphoria over the U.S. auto bailout moderated, though yields on mid-term maturities made sizeable one-day rises.

The 10-year Treasury note last traded flat, with yields (UST10Y) at 2.08%, roughly in line with levels late Thursday. Yields on the benchmark security, which move inversely to prices, had fallen as much as 0.9% earlier, sending yields 11 basis points higher.

In light and choppy trading ahead of a holiday-shortened week, short to medium term Treasurys (UST2YR) took the brunt of selling. Yields on two-year rose 5 basis points to 0.74%, three-year note yields gained 8 basis points to 1.01% and five-year notes advanced 6 basis points to 1.32%.

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