Investors bypassing the Federal Reserve’s network of primary dealers won record amounts of securities at the $109 billion in U.S. Treasury auctions this week, underscoring the appeal of the world’s safest securities.
Treasuries rose for the first time in three days as U.S. retail sales unexpectedly fell in January by the most since June 2012 and initial claims for jobless benefits rose more than forecast last week.
Treasury 10-year note yields reached almost a 10-day high amid speculation harsh winter weather is masking strength in the U.S. economy and the Federal Reserve won’t hold off on further reducing its bond purchases.
The Federal Reserve is likely to announce next week a round of asset purchases focused on mortgages to bolster President Barack Obama’s efforts to help debt-strapped homeowners refinance, Toronto-Dominion Bank’s Richard Gilhooly said.
Treasuries rose the most in almost two weeks, pushing the 10-year note yield further below the level when the Federal Reserve voted last month to taper its bond purchases, as reports showed an uneven economic expansion.
The dollar declined from a one-week high as speculation the Federal Reserve will begin reducing its stimulus measures as soon as next month weighed on demand for assets denominated in the U.S. currency.
Treasuries fell, pushing 30-year bond yields to almost a two-year high, after reports showing stronger-than-forecast economic growth and jobs bolstered speculation the Federal Reserve may reduce its bond-buying.