Two-year Treasuries rose on speculation the results of bank-stress tests will show some of the biggest financial institutions need new capital, stoking demand for the safety of U.S. government debt.
The advance pushed the yield on the two-year note down from the highest level in a month. Regulators determined that Bank of America Corp. needs $34 billion, the largest requirement of the 19 U.S. lenders reviewed, according to a person familiar with the matter. Ten-year securities were little changed before a record $22 billion sale of 10-year notes today.
“There are still bits and pieces of bad news about that have some effect on the market,” said David Keeble, head of fixed-income strategy in London at Calyon, the investment- banking unit of Credit Agricole SA. “These little pieces of bad news fly in the face of lots of good news stories and this tempers their impact. There is also the issue of supply.”
The two-year note yield fell two basis points to 0.95 percent as of 9:56 a.m. in London, according to BGCantor Market Data. The 0.875 percent security maturing in April 2011 rose 1/32, or 31 cents per $1,000 face amount, to 99 27/32.
The yield on the 10-year security was little changed at 3.17 percent.
The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow. Fed Chairman Ben S. Bernanke said yesterday that another shock to the financial system may stall the economic recovery.
Jobless Report
The pace of U.S. job losses is slowing, a report may show today, adding to evidence the worst of the economic slump is over. ADP Employer Services will say U.S. companies cut 645,000 workers in April, down from 742,000 in March, according to the median estimate in a Bloomberg survey of 28 economists.
Today’s 10-year sale comes after a three-year auction yesterday. The government is scheduled to sell 30-year bonds tomorrow.
Ten-year notes yielded 2.95 percent at the prior auction of the maturity on April 9. Investors bid for 2.49 times the amount of debt on offer, versus an average for the past 10 sales of 2.21 times.
The advance pushed the yield on the two-year note down from the highest level in a month. Regulators determined that Bank of America Corp. needs $34 billion, the largest requirement of the 19 U.S. lenders reviewed, according to a person familiar with the matter. Ten-year securities were little changed before a record $22 billion sale of 10-year notes today.
“There are still bits and pieces of bad news about that have some effect on the market,” said David Keeble, head of fixed-income strategy in London at Calyon, the investment- banking unit of Credit Agricole SA. “These little pieces of bad news fly in the face of lots of good news stories and this tempers their impact. There is also the issue of supply.”
The two-year note yield fell two basis points to 0.95 percent as of 9:56 a.m. in London, according to BGCantor Market Data. The 0.875 percent security maturing in April 2011 rose 1/32, or 31 cents per $1,000 face amount, to 99 27/32.
The yield on the 10-year security was little changed at 3.17 percent.
The banks may outline their strategies to add capital, or in other cases buy out government stakes, after the Federal Reserve publishes the stress tests results tomorrow. Fed Chairman Ben S. Bernanke said yesterday that another shock to the financial system may stall the economic recovery.
Jobless Report
The pace of U.S. job losses is slowing, a report may show today, adding to evidence the worst of the economic slump is over. ADP Employer Services will say U.S. companies cut 645,000 workers in April, down from 742,000 in March, according to the median estimate in a Bloomberg survey of 28 economists.
Today’s 10-year sale comes after a three-year auction yesterday. The government is scheduled to sell 30-year bonds tomorrow.
Ten-year notes yielded 2.95 percent at the prior auction of the maturity on April 9. Investors bid for 2.49 times the amount of debt on offer, versus an average for the past 10 sales of 2.21 times.
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