Treasuries pared losses after the U.S. sale of $13 billion in 30-year bonds was met with stronger-than-average demand. The securities drew a yield of 3.230 percent, compared with a forecast of 3.233 percent in a Bloomberg News survey of nine of the Federal Reserve’s 21 primary dealers.
The bid-to-cover ratio, which compares total bids with the amount of securities offered, was 2.76, compared with an average of 2.65 for the past 10 sales. The two-year yield was little changed at 0.29 percent and the rate on 30-year bonds was up 1.7 basis points to 3.21 percent.
Ten-year yields rose for a second day, after dipping below 2 percent for the first time in a month on April 10 as the note’s price climbed for five straight days amid renewed concern over Europe’s debt crisis. The rally in bonds ended yesterday after the European Central Bank’s Benoit Coeure spurred speculation the ECB would buy Spanish debt to suppress the nation’s borrowing costs.
‘A Little Too Aggressive’
“The recent run-up in prices was a little too aggressive and now we are seeing some giveback of the rally in Treasuries, especially with stocks doing better,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners. “We’ve seen some large swings in the market over the last few days which shows that there is a lot of indecisiveness in the market regarding the economy and the need for more easing. No one wants to miss the big trade.”
The S&P GSCI Index of commodities climbed 1.2 percent today, adding to yesterday’s 0.8 percent advance. Copper rallied 2.2 percent to $3.7205 a pound.
Oil added 0.9 percent to $103.64 a barrel in New York. Natural gas futures in New York fluctuated after dipping below $2 per million British thermal units for the first time in a decade yesterday amid concern that a supply glut in the U.S. will worsen amid warm weather.
The Stoxx Europe 600 Index climbed 1.2 percent. Hays Plc rallied 8.9 percent as the U.K. recruitment company forecast full-year operating profit near the top end of analysts’ estimates. Banco Espirito Santo SA plunged 11 percent as Portugal’s biggest publicly traded bank by market value said it plans to sell as much as 1.01 billion euros ($1.3 billion) in stock.
Germany’s DAX Index has rebounded 2.1 percent in two days after slumping 6.4 percent in the previous four sessions as Spanish 10-year yields topped 6 percent for the first time this year, fueling concern Europe’s biggest economy will have to fund another bailout.
Options traders increased bearish bets on the DAX to a more than five-year high versus the rest of Europe, seeking to protect gains after the German equity gauge rallied 17 percent in the first quarter. Puts outnumbered calls by 1.41-to-1 for the DAX yesterday, according to data compiled by Bloomberg. The ratio exceeded the put-to-call measure for the Euro Stoxx 50 Index by 24 percent on March 29, the most since December 2006