US 10’s Print Three Month High Yield

Treasuries fell for a third day, with the 10-year note yield touching a more than three-month high, as a report showing companies added more jobs inn December boosted speculation tomorrow’s monthly employment report may top forecasts.

The yield on the benchmark security rose the most since October yesterday as lawmakers approved a budget averting income-tax increases for more than 99 percent of households, breaking an impasse about how to avert the so-called fiscal cliff. Congress must next tackle the U.S. debt ceiling, which reached its $16.4 trillion limit on Dec. 31. Losses may be tempered as the 10-year note yield touched 1.87 percent, the highest level since Sept. 17, indicating the security may be oversold.

“Everybody seems to be of a mindset that we’ve skirted the worst of the pernicious effects of the fiscal cliff, with the result that the economy is unlikely to go into recession this year,” said William O’Donnell, head U.S. government-bond strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit in Stamford, Connecticut, one of 21 primary dealers that trade with the Federal Reserve.

Ten-year note yields rose two basis points, or 0.02 percentage point, to 1.86 percent at 1:47 p.m. New York time, according to Bloomberg Bond Trader data. The price of the 1.625 percent security fell 6/32 or $1.88 cents per $1,000 face value to 97 29/32.
The 30-year bond yield rose three basis points to 3.07 percent after touching 3.08 percent, also the highest since Sept. 17.

Bloomberg

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