Treasury 10-year notes rose for a third day as investors sought the safest assets after two of Portugal’s ministers resigned from the government, reigniting concern the European debt crisis is worsening.
Thirty-year bonds advanced for a sixth day after Portuguese Foreign Affairs Minister Paulo Portas and finance chief Vitor Gaspar both quit, threatening the stability of the ruling coalition and pushing up the nation’s borrowing costs. Treasuries declined last month after Federal Reserve Chairman Ben S. Bernanke said the central bank may scale back purchases of the securities later this year. Economists say a U.S. report today will show companies stepped up hiring last month.
“What we’re seeing now is political uncertainty once again,” said Orlando Green, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “That’s come back on the agenda after the limelight shifted to the Fed in recent weeks. In uncertainty you get back to the safer assets and that’s why Treasuries are benefitting from this situation.”
The benchmark 10-year yield fell three basis points, or 0.03 percentage point, to 2.44 percent at 6:50 a.m. in New York, according to Bloomberg Bond Trader prices. The 1.75 percent note maturing in May 2023 rose 9/32, or $2.81 per $1,000 face amount, to 94. The 30-year yield also dropped three basis points, to 3.44 percent.
Portuguese Prime Minister Pedro Passos Coelho told voters in a televised speech from Lisbon last night he’ll try to hold his government together after Portas, leader of junior coalition party CDS, quit in protest at the government’s budget policy.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Dean Popplewell
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.
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019