Treasuries Close on Lows
09-May-13 15:33 ET
EUR/USD: 1.3042Treasuries Close on Lows
: Treasuries ended on their lows after rumors began to surface suggesting the Fed was looking to taper its QE program. The late-day selling dropped maturities back onto their overnight lows with most maturities seeing small losses into the cash close. Today’s $16 bln 30-yr bond auction was the most successful of the week, drawing 2.980% and a 2.53x bid/cover. Solid take downs by both indirect (38.8%) and direct (15.5%) bidders left primary dealers with just 45.7% of the supply. Significant underperformance came at the expense of the 10-yr note as selling ran its yield up more than 5 bps on the session to 1.813%. The benchmark yield will be tracked closely over the coming days as action tests resistance in the 1.800/1.850% area. Today’s selling swung the yield curve steeper as the 2-10-yr spread widened to 159 bps.
Elsewhere, precious metals were under pressure as gold sank $18 to $1456 and silver shed $0.25 to near $23.65. Friday’s data is light as the just the Treasury budget (14) is released.
Chicago’s Evans will make opening remarks at the Federal Reserve Bank’s Annual Conference on Bank Structure and Competition (8:25). Fed Chairman Bernanke will speak at the Chicago Fed’s conference on Bank Structure and Competition (9:30). KC’s George will be at the Wyoming Business Alliance in Jackson, WY (14).