U.S. 30-year yields surged the most among developed nation debt this quarter as analysts said retail sales data today will add to signs of economic growth, boosting the case for the Federal Reserve to cut its bond purchases.
The Treasury’s auction of $21 billion in 10-year notes drew weaker-than-average demand as speculation mounted that the world’s biggest economy is strong enough for the Federal Reserve to reduce bond purchases.
Japanese index futures fell as the yen maintained its rebound from a six-month low amid concern the U.S. budget deal will give the Federal Reserve confidence to reduce stimulus. Copper futures slipped and Australia’s dollar traded at a five-year low versus New Zealand’s currency.
The Defense Department would get $22.3 billion in relief from spending cuts this fiscal year under the budget agreement reached by congressional negotiators, according to aides to lawmakers and Pentagon officials.
U.S. stocks fell the most in a month and Treasuries dropped on speculation the budget agreement will make the Federal Reserve more confident to reduce stimulus. Gasoline and oil slid while the yen and euro strengthened.
Congressional negotiators selling a budget accord won Republican endorsements for the plan to ease automatic U.S. spending cuts for two years, remove the risk of a government shutdown and cut the deficit by $23 billion.