U.S. Treasuries with Poor September as Economy Firms

Treasuries posted their worst month of the year amid speculation the Federal Reserve will signal an increase in interest rates next year as the economic recovery firms.

Benchmark 10-year-note yields rose today before reports this week forecast to show American employers added more than 200,000 jobs in September. Withdrawals from a Pacific Investment Management Co. exchange-traded fund that was run by Bill Gross slowed yesterday after record redemptions the day the star trader left. The European Central Bank may announce further monetary stimulus to avert deflation Oct. 2.

“The Treasury market has responded to the Fed shift in dialog that has tended toward the hawkish side,” said Christopher Sullivan, who oversees $2.3 billion as chief investment officer at United Nations Federal Credit Union in New York. “The data is getting better, but the market and the Fed are waiting to see if the labor market can still improve and if it will bleed over into wage gains.”

Bloomberg

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