Bonds down after ECB rate cut aids riskier assets
NEW YORK (Reuters) – Treasury debt prices fell on Thursday after a rate cut by the European Central Bank and a drop in U.S. jobless claims helped feed a bid for riskier assets.
The ECB, under its new leader, President Mario Draghi, cut its main interest rate by 25 basis points to 1.25 percent as the euro zone’s worsening debt crisis overcame inflation concerns.
A fall in new weekly claims for U.S. jobless benefits outweighed other U.S. data showing the economy’s service sector didn’t grow as fast as expected in October.
“The drop in new U.S. jobless claims and the ECB’s decision to cut rates fueled the ‘risk-on’ trade so credit spreads tightened, stocks rose and Treasuries sold off,” said Eric Stein, portfolio manager at Boston-based Eaton Vance Investment Managers, with $177.8 billion in assets under management.
Benchmark 10-year Treasury notes fell 17/32 as their yields rose to 2.05 percent from 1.99 percent late Wednesday. Thirty-year Treasury bonds slid 1-13/32. Their yields rose to 3.08 percent from 3.02 percent Wednesday.
Major stock indexes .SPX.IXIC.DJI added to gains from the previous session.
“The rate cuts came a little sooner than the markets expected, but many investors were puzzled earlier this year when the ECB raised rates, so the ECB is reversing what was bad policy in the first place,” said Cary Leahey, senior economist at Decision Economics in New York.
Bonds slip after 3-day rally, Fed awaited
NEW YORK, Nov 2 (Reuters) – U.S. Treasuries reversed some gains on Wednesday after a three-day rally as investors looked ahead to a Federal Reserve statement due later in the day and kept an eye on euro zone sovereign debt developments.
Stock market gains also weighed on Treasuries as investors sought value in riskier assets. Major stock indices rose more than 1 percent.
Markets are mainly waiting for the Federal Reserve’s statement around 12:30 p.m. (1630 GMT) at the conclusion of a two-day policy meeting. Fed Chairman Ben Bernanke will hold a press briefing at 2:15 p.m.
Analysts said the Fed could begin to prepare financial markets for further monetary easing at the end of the meeting, even if it doesn’t begin a new easing plan right away.
After a three-day rally, benchmark 10-year Treasury notes slipped 19/32 on Wednesday, their yields rising to 2.06 percent from 1.99 percent late Tuesday.
Thirty-year Treasuries were down 2-8/32, their yields rising to 3.10 percent from 3 percent late Tuesday.
The Treasury announced a $72 billion quarterly refunding of its 3-year, 10-year and 30-year debt securities, which will raise $48.1 billion in new cash.
NY exhibit pays homage to documentary photographers
NEW YORK (Reuters) – Compelling portraits of everyday life drawn from the streets of New York City form the heart of a new exhibit opening on Friday at The Jewish Museum.
“The Radical Camera: New York’s Photo League, 1936-1951,” recognizes the role that the League played in the evolution of the documentary photograph,
The organization of young, idealistic photographers saw documentary photography as both an art form and a way to argue for social justice.
“The documentary photograph changed as a result of the really great teaching that distinguished the League in the form of (photographer) Sid Grossman who pushed his students to discover the meaning of their work, but also their relationship to it,” said Mason Klein, curator at The Jewish Museum. “That helped their work become more subjective and more poetic.”
The League’s photographers captured public and private moments: tenement balconies full of people angling for a good view of a passing parade, a woman gazing at a Bleeker Street bakery window, a solitary walker on the Brooklyn Bridge, swing dancers in Harlem. Some images are beautiful; some stark. Many comment subtly on class, race, and disparities of opportunity.
The League’s darkroom, exhibition space, and its acclaimed newsletter “Photo Notes” all drew photographers together in a space where they could socialize and exchange ideas.
Women actively participated in the League where they found rare access and recognition.
Bonds up as Greek plan for loan vote rattles markets
NEW YORK, Nov 1 (Reuters) – U.S. Treasuries prices climbed for a third straight day on Tuesday as investors sought safe-haven U.S. debt after Greece’s surprise call for a referendum on the latest deal for aid from the European Union.
Greece said it would hold a referendum on a new aid package from the EU, designed to prevent a sovereign default, asking voters to decide if they wanted to adopt the drastic spending cuts required to get its next set of rescue loans from the euro zone and the International Monetary Fund.
“We trust citizens, we believe in their judgment, we believe in their decision,” Prime Minister George Papandreou told ruling socialist party lawmakers.
The possibility that Greek voters could vote down the euro zone’s rescue plan raised the specter of a Greek default and a financial market panic that could undermine investors’ faith in the debt of other European countries.
“The Papandreou proposal threw a massive amount of uncertainty into markets that really needed some stability,” said Brian Svendahl, managing director and senior portfolio manager at RBC Global Asset Management, with more than $250 billion in assets under management, in Minneapolis, Minnesota.
Bids for safe-haven U.S. debt pushed benchmark 10-year Treasury notes up more than 1 point and drove their yields below 2 percent to 1.98 percent from 2.11 percent on Monday.
“Greece’s decision to hold a referendum took everyone by surprise,” said John Canavan, market analyst at Stone & McCarthy Research Associates in Princeton, New Jersey. “A great deal of work was done last week at the European summit to stave off a Greek default. Putting (the rescue package) up for referendum raises the risk that it was all for naught.
Bonds up as Greece plans vote on loans, austerity
NEW YORK, Nov 1 (Reuters) – U.S. Treasuries climbed for the third straight day on Tuesday as Greece’s planned vote on severe austerity measures needed to get its latest loans to prevent default drove demand for safe-haven U.S. debt.
Greece, the birthplace of democracy, said it would hold a referendum on a new aid package from the European Union, asking voters to decide on whether they wanted to adopt the drastic spending cuts required to get its next set of rescue loans from the euro zone and the International Monetary Fund.
The possibility that Greek voters could vote down the euro zone’s rescue plan raised the specter of a Greek default and a financial market panic that could undermine investors’ faith in the debt of other European countries.
Volatile and skittish markets reacted accordingly.
A bid for safe-haven U.S. debt pushed benchmark 10-year Treasury notes up more than 1 point and drove their yields below 2 percent to 1.99 percent from 2.11 percent on Monday.
“Greece,” said John Canavan, market analyst at Stone & McCarthy Research Associates in Princeton, New Jersey. “It’s a return of the safe-haven bid after Greece’s decision to hold a referendum took everyone by surprise.”
“A great deal of work was done last week at the European summit to stave off a Greek default,” Canavan said. “Putting (the rescue package) up for referendum raises the risk that it was all for naught.
Bonds rally as stock losses re-fuel safety bid
NEW YORK (Reuters) – U.S. Treasuries prices rallied on Monday as stock market losses hurt investors’ appetite for risk, refueling the bid for safe-haven U.S. government debt.
Major stock indices .SPX.IXIC.DJI fell more than 1 percent after rallying strongly this month.
The bankruptcy of MF Global (MF.N: Quote, Profile, Research, Stock Buzz) added to the nervousness.
“It’s the move down in stocks and also one of those ‘Who’s next?’ trades prompted by the MF Global bankruptcy filing. But it’s also because, after a phenomenal month, investors can’t help but have second thoughts on the last day of the month, particularly given what little transpired last week in Europe,” said Cary Leahey, managing director and senior economist at Decision Economics in New York.
MF Global Holdings Ltd (MF.N: Quote, Profile, Research, Stock Buzz), a primary dealer and futures broker run by former Goldman Sachs chief Jon Corzine, filed for Chapter 11 bankruptcy after a tentative deal with a buyer fell through. The New York Federal Reserve suspended the firm from conducting new business with the central bank.
The appetite for safe-haven U.S. debt was whetted by more than the troubles of one firm.
“Euphoria about the Eurozone package (to address the continent’s debt crisis) has been tempered as the harsh reality of the detail begins to bite,” said Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh.
Safety bid re-fuels bond rally
NEW YORK, Oct 31 (Reuters) – U.S. Treasuries prices rallied on Monday as investor appetite for risk cooled, re-fueling the bid for safe-haven U.S. government debt.
The Federal Reserve Bank of New York’s suspension of troubled MF Global from conducting new business with the New York Fed added to the nervousness. But demand for safe-haven U.S. debt was motivated by more than the troubles of one firm.
“Difficulties for individual companies can sometimes cause a safe-haven bid, but there are more than enough macro stories in Europe, Japan and China this morning to explain why bonds are moving as they are,” said Andrew Milligan, head of global strategy at Standard Life Investments in Edinburgh.
“Euphoria about the euro zone package (to address the continent’s debt crisis) has been tempered as the harsh reality of the detail begins to bite,” he said, pointing to forecasts that France could enter recession this winter as banks are forced to cut back on lending.
“This is encouraging speculation that the European Central Bank might cut interest rates, if not this week, then at its next meeting,” Milligan said, referring to the European Central Bank.
Benchmark 10-year Treasury notes rose 26/32 on Monday, their yields falling to 2.22 percent from 2.32 percent late on Friday.
Thirty-year Treasury bonds rose 2-13/32, their yields falling to 3.25 percent from 3.37 percent late on Friday.
Bond prices up as higher yields attract buyers
NEW YORK, Oct 28 (Reuters) – U.S. Treasuries prices rose on Friday as lower prices and the highest yields in more than 2-1/2 months drew buyers.
The euphoria that caused riskier assets to rally on Thursday on Europe’s new strategy to contain its debt crisis cooled somewhat. That added support to the bid for safe-haven U.S. government debt.
U.S. Treasuries reached their best levels after an auction of Italian government debt suggested the euro zone rescue deal had not restored investor appetite for Italian debt.
Benchmark 10-year Treasury notes , which fell 1-1/2 points in price the previous day, were up 27/32 at midday on Friday, their yields easing to 2.30 percent from 2.40 percent late on Thursday.
Thirty-year Treasury bonds, which fell more than four points on Thursday, were up two points on Friday, their yields falling to 3.36 percent from 3.46 percent late on Thursday.
Thursday’s rise in yields, which lured buyers on Friday, was the sharpest jump in 2-1/2 months.
But the very mild profit-taking in stocks in the context of the previous day’s rally indicated markets gave some credence to the idea that Europe could implement its rescue plan.
Bonds tumble as Europe debt deal hurts safety bid
NEW YORK (Reuters) – A long-awaited plan to contain Europe’s debt crisis caused investors to spurn safe-haven U.S. government debt on Thursday, pushing bond prices down and benchmark yields to their highest in 2-1/2 months.
Investors’ decision to eschew U.S. debt in favor of riskier assets fed a rally on Wall Street where all three major U.S. stock indexes rose more than 3.5 percent.
Analysts said the “fear trade” that had made investors ready to hold Treasuries despite low yields moderated on news that euro zone leaders had struck a deal to contain the currency bloc’s two-year-old debt crisis.
“If Treasuries are the ‘fire insurance’ in an investment portfolio, people have started to scale back on how much insurance they think they really need,” said Jerry Webman, chief economist at OppenheimerFunds in New York, which has $188 billion in assets under management. “Investors have decided they’re not going to own Treasuries at any price,”
The consequent selling pushed benchmark 10-year Treasury notes down 1-16/32 in price, sending their yields up to 2.40 percent from 2.21 percent late on Wednesday.
Thirty-year Treasury bonds tumbled 4-12/32, shoving their yields up to 3.44 percent from 3.23 percent on Wednesday.
The jump in yields was the sharpest in 2-1/2 months.
Bonds fall as euro zone progress hurts safety bid
NEW YORK, Oct 26 (Reuters) – U.S. Treasuries prices fell on Wednesday as a stock market rally and progress on the euro zone debt crisis damped investors’ desire for safe-haven U.S. debt.
News that the euro zone planned to leverage its 440 billion euro rescue fund, the EFSF, “several fold” lifted stocks and further depressed safe-haven U.S. government debt.
The one exception was the Treasury’s sale of five-year notes, which got a good reception as recent price cuts and a corresponding rise in yields drew buyers.
News of the well-bid auction briefly caused Treasuries to trim some losses, but bonds moved down again when stocks rose.
Even as the euro zone news boosted riskier assets and hurt bonds, analysts said market volatility could persist.
While the euro zone plans to leverage the EFSF, finance ministers will agree on the details of how that will be done only in November, according to a draft statement obtained by Reuters and to be issued after a summit on Wednesday.
The statement said two options are being considered to leverage the fund, one involving issuing risk insurance and the other built around the facility taking part in a special purpose investment vehicle. Both models could be deployed simultaneously, the draft statement said.

