Member access

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

BOND REPORT: Treasurys Prices Rise After Housing Data

01/22/2013 | 05:14pm US/Eastern

By Wallace Witkowski and Polya Lesova, MarketWatch

SAN FRANCISCO (MarketWatch) -- Treasury prices rose Tuesday, reversing earlier losses, following data that showed sales of existing homes declining in December.

Yields on benchmark 10-year notes (10_YEAR) fell less than 1 basis point to 1.85%, after being up more than 3 basis points at 1.88% earlier in the session.

Yields move inversely to prices. A basis point is one one-hundredth of a percentage point.

Treasury prices started bouncing back after National Association of Realtors data showed a 1% decline in existing-home sales for the final month of 2012.

Earlier, prices were lower after the Bank of Japan said it would adopt a target of 2% inflation and kick off a program of open-ended asset purchases.

While Treasurys were initially weaker on the Bank of Japan's aggressive stance, the housing report turned that momentum around, indicating a tightening housing inventory, said Anthony Valeri, fixed-income strategist at LPL Financial. "They might rally further on that," said Valeri.

Yields on 30-year bonds (30_YEAR) fell less than 1 basis point to 3.03%, after being up as many as 4 basis points earlier in the session.

Adding momentum to the home-sales data was the Federal Reserve's purchase of $1.39 billion in Treasury Inflation Protected Securities, or TIPS, particularly the $1.24 billion in 30-year TIPS purchases, according to Michael Pond, head of global inflation-linked research at Barclays.

Markets were also disappointed in the BOJ plan to wait until 2014 to start asset purchases rather than this year, Pond said.

Criticizing quantitative-easing efforts closer to home, Pimco's Bill Gross said on Twitter that zero-coupon bonds are "future road kill" because of the Fed's current bond buyback rate.

Yields on 5-year notes (5_YEAR) were down less than 1 basis point at 0.76%. Yields on 7-year notes (7_YEAR) were down 1 basis point to 1.24%.

Earlier, yields had gotten a boost after the ZEW indicator, a gauge of economic sentiment for Germany, increased by a surprising 24.6 points in January to stand at 31.5 points. The rise was much bigger than economists had expected.

The positive German data reduced demand for safe-haven assets such as Treasurys.

On Wall Street, U.S. stocks traded higher following a long holiday weekend, as investors digested a raft of quarterly earnings reports. The Dow Jones Industrial Average (DJI) gained 0.5% and the S&P 500 Index (SPX) rose 0.4%, while the Nasdaq Composite Index (RIXF) closed up 0.3%.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

React to this article
Latest news
Date Title
09:38p MANULIFE FINANCIAL : John Hancock Hedged Equity & Income Fund Releases Earnings Data
09:37pDJPETROLEO BRASILEIRO PETROBRAS : Moody's Downgrades All Petrobras Ratings
09:36p DONACO : ASX:DNA) To Acquire Star Vegas Resort and Club
09:36p DONACO : ASX:DNA) Investor Presentation
09:35p Family Dollar CEO Howard Levine to sell 1M to 2M shares of company
09:35pDJSingapore December Bank Loans S$607.96 Billion Vs S$608.17 Billion in November
09:35p TRACON Pharmaceuticals Announces Pricing of Initial Public Offering
09:34p IOOF : Balance Investor Trust takes SuperRatings top spot
09:34p AWS move, disclosure suggest Amazon yielding more to Wall Street
09:34p IDOX : Cheltenham embraces QR codes to promote public safety on licensed vehicles
Latest news
Advertisement
Hot News 
GROUPE STERIA : Sopra Steria Group: Financial calendar 2015
NEXT FIFTEEN COMMUNICATIONS : Raises GBP4.3 Million, To Beat Expectations (ALLISS)
PERFORMANT FINANCIAL : Entry into a Material Definitive Agreement, Results of Operations and Financial Condition, Unregistered Sale of Equity Securities, Other Events, Financial Statements and Exhibits (form 8-K)
VENAXIS : Other Events, Financial Statements and Exhibits (form 8-K)
GEVO : Announces Pricing of Public Offering of Common Stock and Warrants
Most Read News
06:24p Wall Street finishes higher in afternoon rally as oil gains
07:48pDJCurrency Tumult Stokes Big Bets--Update
06:39p Cheaper gasoline helps Visa report better-than-expected profit
06:46pDJINTERCEPT PHARMACEUTICALS : Says FDA Grants Breakthrough Status
06:18p KINDER MORGAN : Taking on the pipeline; Residents plot course of action against Kinder Morgan
Most recommended articles
09:37pDJPETROLEO BRASILEIRO PETROBRAS : Moody's Downgrades All Petrobras Ratings
09:35pDJSingapore December Bank Loans S$607.96 Billion Vs S$608.17 Billion in November
09:34p AWS move, disclosure suggest Amazon yielding more to Wall Street
09:30pDJShake Shack Prices IPO Above Expectations
09:27pDJSingapore December M1 Money Supply S$160.23 Billion Vs S$161.22 Billion in November
Dynamic quotes  
ON
| OFF