Treasurys Post Mild Gains On Housing-Starts Report
April 28, 2011
Treasurys advanced Friday, regaining some of the losses suffered earlier this week with help from somewhat favorable data on U.S. housing and from developments abroad. The price of the benchmark 30-year bond rose 1/2, or $5.00 for a bond with a face value of $1,000, to 99 24/32 on Friday. The yield, which moves in the opposite direction from the price, fell to 6.76% from 6.80% late Thursday. Treasurys began the day on an upbeat note after moving higher in overseas trading, where they benefited from speculation the Bundesbank will ease credit conditions. German money supply data will be released early next week and the Bundesbank will hold a policy meeting Thursday. Two days before the Bundesbank meeting, the Federal Reserve's own policy makers will gather for a Federal Open Market Committee meeting. ``I don't think people have any fear of the Fed meeting'' on Tuesday, said Markita Sang, a government bond trader at Chase Securities Inc.. Indeed, all 37 primary dealers surveyed by Dow Jones News Services predicted the Fed wouldn't tighten monetary policy next week. The market's confidence in that forecast helped boost prices this session, analysts said. Bonds extended their gains in New York trading after the Commerce Department reported that new housing starts in July fell for the third straight month to the lowest level in more than a year. Housing starts slipped 1.3% to a 1.455 million annual rate from a downward revised June rate of 1.474 million. Bond investors are cheered by signs of weakness in the economy because such indications suggest that inflationary pressures are in check. In other credit markets: Corporate bond traders closed a week full of new issues. Mortgage-backed securities advanced, propelled by a surge in foreign interest and Wall Street's search for collateral. Municipal bonds rose slightly in thin trading.
