Ali
06-10-2005, 08:54 AM
U.S. 10-Year Notes Fall for 3rd Day, Longest Slump Since March
June 10 (Bloomberg) -- U.S. 10-year Treasuries fell for a third day, the longest slump since March, on speculation yields near their lowest in 14 months don't reflect prospects for economic growth. Two-year notes are headed for their biggest weekly decline since April.
Treasuries remained lower after a Commerce Department report today showed the trade deficit in April widened as imports surged. The data may foster speculation that the economy is on what Federal Reserve Chairman Alan Greenspan said yesterday was ``firm footing.''
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``Greenspan caused some people to temper some of their bullish views on Treasuries,'' said Steve Mansell, an interest- rate strategist at Banc of America Securities in London. ``The Fed is going to keep hiking rates at a measured pace which means at least another two more rate increases.''
The trade deficit widened to $57 billion from $53.6 billion. A deficit of $58 billion was expected, according to the median estimate of economist surveyed by Bloomberg News. Economists have lifted their forecasts for growth, a Bloomberg monthly survey shows.
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Interest-Rate Futures
The yield on the September Eurodollar futures contract rose 8 basis points this week, to 3.78 percent, suggesting traders expect the Fed will increase its target to at least 3.5 percent this year. The futures settle at a three-month lending rate that has averaged 21 basis points more than the Fed's target the past 10 years.
The Fed has raised its rate target for overnight loans between banks by a quarter-point eight times since June 2004. Policy makers will raise the rate by another 25 basis points to 3.25 percent when they next meet on June 29-30, according to the median forecast of 67 economists surveyed by Bloomberg.
``Most recent data support the view that the soft readings on the economy observed in the early spring were not presaging a more serious slowdown in the pace of activity,'' Greenspan told the Joint Economic Committee of Congress in Washington. ``The U.S. economy seems to be on a reasonably firm footing and underlying inflation remains contained.''
June 10 (Bloomberg) -- U.S. 10-year Treasuries fell for a third day, the longest slump since March, on speculation yields near their lowest in 14 months don't reflect prospects for economic growth. Two-year notes are headed for their biggest weekly decline since April.
Treasuries remained lower after a Commerce Department report today showed the trade deficit in April widened as imports surged. The data may foster speculation that the economy is on what Federal Reserve Chairman Alan Greenspan said yesterday was ``firm footing.''
---
``Greenspan caused some people to temper some of their bullish views on Treasuries,'' said Steve Mansell, an interest- rate strategist at Banc of America Securities in London. ``The Fed is going to keep hiking rates at a measured pace which means at least another two more rate increases.''
The trade deficit widened to $57 billion from $53.6 billion. A deficit of $58 billion was expected, according to the median estimate of economist surveyed by Bloomberg News. Economists have lifted their forecasts for growth, a Bloomberg monthly survey shows.
---
Interest-Rate Futures
The yield on the September Eurodollar futures contract rose 8 basis points this week, to 3.78 percent, suggesting traders expect the Fed will increase its target to at least 3.5 percent this year. The futures settle at a three-month lending rate that has averaged 21 basis points more than the Fed's target the past 10 years.
The Fed has raised its rate target for overnight loans between banks by a quarter-point eight times since June 2004. Policy makers will raise the rate by another 25 basis points to 3.25 percent when they next meet on June 29-30, according to the median forecast of 67 economists surveyed by Bloomberg.
``Most recent data support the view that the soft readings on the economy observed in the early spring were not presaging a more serious slowdown in the pace of activity,'' Greenspan told the Joint Economic Committee of Congress in Washington. ``The U.S. economy seems to be on a reasonably firm footing and underlying inflation remains contained.''