According to Bloomberg treasuries rose, pushing yields on two- and 10-year notes toward record lows reached yesterday, as stocks tumbled a day after the Federal Reserve offered a dimmer view of the economy than it did in June.
The extra yield Treasury investors get to hold 10-year notes instead of two-year debt was the narrowest since October as investors worried the European debt crisis would grow before today’s $24 billion auction of the securities, the second of three note and bond sales this week totaling $72 billion. Stocks fell as Paris-based lender Societe Generale SA retreated 16 percent and France’s borrowing costs rose.
“We are seeing a yield grab,” said Larry Milstein, managing director in New York of government and agency debt trading at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “By locking the front end of the curve for two years, the Fed wants to push investors further out the curve and push them into risk, and that is what we are seeing….”
Read more at http://www.bloomberg.com/news/2011-08-08/treasuries-rise-reversing-loss-as-asian-share-slide-boosts-debt-demand.html
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