Treasuries fell, pushing 10-year yields to a three-week high, as gains in U.S. factory orders and company hiring fueled bets the economy is improving enough for the Federal Reserve to raise interest rates next year.
The difference between yields on 10- and 30-year U.S. Treasuries narrowed to the least since 2010 after the Federal Reserve indicated interest rates may rise faster than anticipated while the pace of growth is moderate.
U.S. stocks rose, reversing yesterday’s decline, as signs the economy is strengthening overshadowed concern interest rates may be increased in the middle of next year. Emerging-market equities fell with gold, crude oil and coffee as the dollar climbed.
Treasuries traded in the tightest range in almost a month after reports showed U.S. companies expanded hiring at a slower-than-forecast pace and a services- industry index declined more than projected, adding to speculation that economic growth is stalling.
Treasuries climbed for a second day as the U.S. auctioned $35 billion in five-year notes to stronger-than average demand amid concern harsh weather may be masking a fundamental slowdown in the economy.
Treasuries fell, pushing 10-year note yields to a two-week high, as the U.S. sold $24 billion of the securities a day after Federal Reserve Chairman Janet Yellen said the central bank remains on course to taper bond purchases.
The U.S. auction of $24 billion of 10-year notes drew the largest share since June of bidders from an investor class that includes foreign central banks as a back- up in yields and concern economic growth is uneven fueled demand for safety.