Scottish Independence Triggers Safe Haven Flows into Treasuries

Treasuries rose, with 10-year notes halting a slide that sent them to their biggest weekly loss since March, as investors sought a haven following a poll showing most voters in Scotland want independence.

Yields on the benchmark yields fell as JPMorgan Chase & Co. and Morgan Stanley cut their year-end forecasts. U.S. government securities are heading for their biggest annual advance since 2011, supported by demand due to unrest in Ukraine and the Middle East. The U.S. plans to sell $61 billion of notes and bonds during three days starting tomorrow.

“The idea that you have to get well above 2.42 percent to keep the market intact has faded,” said Jim Vogel, head of agency-debt research at FTN Financial in Memphis, Tennessee. “It’s an analysis of the price action after the selloff. We’ve readjusted.”

The U.S. 10-year yield fell three basis points, or 0.03 percentage point, to 2.42 percent at 9:06 a.m. New York time, according to Bloomberg Bond Trader prices. The 2.375 percent note due August 2024 rose 9/32, or $2.81 per $1,000 face amount, 99 17/32.

The U.S. is scheduled to sell $27 billion of three-year notes tomorrow, $21 billion of 10-year debt the following day and $13 billion of 30-year bonds on Sept. 11.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza