Treasuries rise 8th day, longest gain since 2008 on safety bid

Home Sales

A U.S. government report today will show sales of new homes rose to the most since April 2010, based on a Bloomberg News survey of economists before the Commerce Department reports the number at 10 a.m. New York time.

The central bank is swapping shorter-term Treasuries in its holdings with those due in six to 30 years to put downward pressure on borrowing costs. The Fed plans to buy as much as $5 billion of debt maturing from September 2018 to August 2020 today as part of the program, according to the Fed Bank of New York’s website. The purchases take place at 11 a.m. in New York.

Chicago Fed President Charles Evans is due to speak in Hammond, Indiana today. In a speech last week in Ann Arbor, Michigan, he said the central bank’s expanded easing has the power to make the U.S. economy more resilient.

The five-year notes being sold at 1 p.m. New York time today yielded 0.655 percent in pre-auction trading, versus 0.708 percent at the previous sale of the securities on Aug. 29. The record low auction bid was 0.584 percent on July 27.

Investors bid for 2.92 times the amount offered last month, up from 2.71 times on July 25. The Treasury sold $35 billion of two-year notes yesterday and plans to auction $29 billion of seven-year securities tomorrow. The U.S. is selling $99 billion in notes this week.

Bloomberg News

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