hurricanemaxi
Joined: 17 Sep 2011
Posts: 83
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 Posted: Fri Sep 23, 2011 10:26 pm Post subject: Treasury Bonds Post Biggest Gain Since ’08 on Economy, Fed O |
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Treasury 30-year bonds had their biggest gains in almost three years as investors sought refuge in U.S. government debt amid concern the global economy is on the brink of another recession.
Ten-year note yields dropped to a record yesterday as policy makers worked to contain contagion from the European sovereign debt crisis. Yields on 30-year bonds dropped 41 basis points on the week after the Federal Reserve said on Sept. 21 that it would buy longer-term debt to lower borrowing costs in an initiative known as Operation Twist. The central bank on Sept. 30 will announce its purchase schedule for October.
“Twist will take out as many 30-year bonds as are auctioned each month, so that’s putting downward pressure on yields,” said Ray Remy, head of fixed income in New York at Daiwa Capital Markets America Inc., one of 20 primary dealers that trade directly with the Fed. “The European situation is not going away.”
Thirty-year yields fell to 2.90 percent yesterday in New York, according to Bloomberg Bond Trader prices, the biggest decline since December 2008. The 3.75 percent bond due August 2041 rose 8 21/32 to 116 29/32.
The 10-year yield dropped to a record low of 1.6714 percent. Treasury 10-year yields have fallen more than 1 percentage point during the past three months.
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