NEW YORK, Dec 2 (Reuters) – U.S. Treasuries yields rose on
Monday as investors took a cautious stance ahead of a heavy week
of data, culminating in Friday’s highly anticipated November
employment report, which will be scoured for signals about the
Federal Reserve’s future decisions.
Investors are evaluating when the Fed is likely to view the
economic recovery as being strong enough to begin paring its $85
billion-a-month bond purchase program, after the U.S. central
bank in September surprised investors, who were expecting a cut
in purchases, by leaving it unchanged.
NEW YORK, Nov 29 (Reuters) – U.S. Treasuries ended flat
after a choppy, shortened trading session on Friday as month-end
buying offset some earlier weakness and investors turned their
focus to economic data next week expected to bring new clues
over Federal Reserve policy.
Treasuries had weakened earlier in light trading volumes
with many traders off on Friday. The market closed early after
being closed on Thursday for the U.S. Thanksgiving holiday.
NEW YORK, Nov 26 (Reuters) – When U.S. broker MF Global came
under pressure from lenders, trading partners and clients two
years ago, one of the biggest claims for its funds came from
LCH.Clearnet, a company not very well known outside financial
London-based LCH is one of the world’s largest
clearinghouses, a group of companies that are emerging as the
new superpowers of the global financial system. They guarantee
trades, making good on payments if a trading partner fails.
NEW YORK (Reuters) – Talk that banks may lose an interest rate perk for parking excess cash with the Federal Reserve was revived on Thursday, after Janet Yellen said the U.S. central bank may consider cutting the rate.
The Fed introduced the Interest on Excess Reserves rate (IOER) during the depths of the financial crisis in 2008 as a means of helping the central bank control short-term interest rates. Excess reserves at the Fed have ballooned to around $2.3 trillion, from near nothing before their introduction, Fed data shows.
NEW YORK (Reuters) – Asset managers’ bond holdings are surging as banks that traditionally facilitated trades in debt markets scale back, raising fears that increasingly one-sided markets are at a greater risk of frantic selloffs.
Big U.S. companies, including Verizon (VZ.N: Quote, Profile, Research, Stock Buzz) and Apple (AAPL.O: Quote, Profile, Research, Stock Buzz), have been selling record numbers of bonds to seemingly insatiable demand, as unprecedented stimulus from central bank bond purchases makes borrowing favorable for big corporations and as investors stretch for higher returns.
NEW YORK, Nov 13 (Reuters) – Asset managers’ bond holdings
are surging as banks that traditionally facilitated trades in
debt markets scale back, raising fears that increasingly
one-sided markets are at a greater risk of frantic selloffs.
Big U.S. companies, including Verizon and Apple
, have been selling record numbers of bonds to seemingly
insatiable demand, as unprecedented stimulus from central bank
bond purchases makes borrowing favorable for big corporations
and as investors stretch for higher returns.
NEW YORK, Oct 16 (Reuters) – The dramatic Treasuries selloff
in May and June of this year was worsened by banks paring back
their activities because of reduced risk appetite for bonds,
rather than because the banks faced capital constraints from new
regulations, researchers at the New York Federal Reserve said on
Benchmark 10-year Treasuries yields surged from 1.63 percent
on May 2 to 2.74 percent on July 5, after comments from Federal
Reserve Chairman Ben Bernanke raised fears that the Fed was
closer to paring back its $85 billion bond purchase program,
causing banks and investors to dump the debt.
NEW YORK (Reuters) – Banks and investors are fine-tuning plans to try to reduce the risk that operational failures will disturb crucial short-term lending markets if the U.S. Treasury is late in making its debt payments, though many are skeptical that any U.S. default could be managed smoothly.
Anxiety over the lack of agreement in Washington to raise the U.S. debt ceiling has risen. U.S. Senate negotiations were suspended on Tuesday until House Speaker John Boehner can work out a plan that can pass the House of Representatives.
NEW YORK, Oct 15 (Reuters) – U.S. lawmakers are negotiating
to raise the debt ceiling before the Treasury is expected to run
out of funds, leaving the country at risk of defaulting on its
debt. Below are some key questions relating to the government
bond market’s role in the markets, and how it would be affected
by a potential default.
Why are Treasuries so important?
U.S. government debt is the largest bond market in the world and
is considered one of the most risk-free assets. Treasuries are
used widely to back loans used by financial institutions,
including in the $5 trillion repurchase agreement market. Any
delay in paying interest or principal on Treasuries could
disrupt borrowing in these markets, and harm the credibility of
the U.S. government as a borrower, sending up its interest
costs. That, in turn, could increase costs for corporations,
state and local governments, and foreign entities, many of which
are priced in comparison to the U.S. Treasury rate.
NEW YORK, Oct 9 (Reuters) – Banks and money market funds are
beginning to shun some Treasuries normally used as collateral in
the $5 trillion repurchase agreement market, a sign that the
deadlock over raising the U.S. debt ceiling could disrupt a key
source of day-to-day funding for the financial system.
Treasuries are often pledged against short-term loans in
repo, funds used broadly across the financial system to pay for
investment, trading and other operations vital to the day-to-day
activities of many companies.