Treasuries Drop as Pending Home Resales Rise More Than Forecast

[jpak]

http://www.businessweek.com/news/2010-06-02/treasuries-drop-as-pending-home-resales-rise-more-than-forecast.html

Treasuries fell as pending U.S. home resales increased in April more than economists forecast and stocks advanced, discouraging demand for the relative safety of government debt.

The 10-year note dropped for the first time in almost a week before a government report on June 4 expected by economists to show employment in the U.S. increased in May by the most since 1983. Treasuries rallied last month on Europe’s sovereign- debt crisis, pushing the yield on the 10-year note down the most since December 2008.

“Treasuries are off due to better-than-expected housing data and equity strength,” said Jay Mueller, who manages about $3 billion of bonds at Wells Fargo & Co. in Milwaukee. “We’ve had a pretty good rally in the last few weeks due to global concerns. As some of the air of fear starts to abate, some reversal from the fear trade is occurring.”

Ten-year note yields increased 7 basis points, or 0.07 percentage point, to 3.33 percent at 1:12 p.m. in New York, according to BGCantor Market Data. The price of the 3.5 percent security maturing in May 2020 dropped 18/32, or $5.63 per $1,000 face amount, to 101 14/32.

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