US 10’s Under Pressure on Speculation Services Expanded

Treasuries declined for a second day before a report that economists forecast will show U.S. service industries expanded, reducing demand for the safety of fixed- income assets.

Ten-year Treasuries dropped with German bunds as stocks rallied after China vowed to maintain its growth target and an industry report showed euro-area manufacturing and services contracted less than economists forecast in February. A report later this week will show U.S. employers added 160,000 jobs last month after an increase of 157,000 in January, according to analysts in a Bloomberg News survey.

“Recent data pointed to economic recovery in the U.S.,” said John Stopford, head of fixed income at Investec Asset Management in London. “If this continues in the second half of the year, Treasury yields will have to rise.”

Benchmark 10-year yields rose two basis points, or 0.02 percentage point, to 1.90 percent at 7:21 a.m. in New York, according to Bloomberg Bond Trader data. The price of the 2 percent note due February 2023 fell 6/32, or $1.88 per $1,000 face amount, to 100 29/32.

The rate on similar-maturity German bunds climbed three basis points to 1.44 percent.

The Institute for Supply Management’s index of U.S. non- manufacturing businesses, which cover almost 90 percent of the economy, was 55 in February, versus 55.2 in January, based on a Bloomberg News survey of economists. Readings greater than 50 signal expansion.


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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell