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US notes rise on job loss fear
By Wes Goodman |
January 10, 2009, Saturday
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Print Edition
Print Edition
Treasury 10-year notes rose yesterday for a second day on speculation a Labor Department report will show that the United States lost more than half a million jobs last month.
Notes have trimmed losses from the start of 2009 as investors sought the relative safety of government debt on concern the US recession is worsening. Retailers including Wal-Mart Stores Inc and Macy's Inc cut earnings forecasts, while Alcoa Inc, the largest US aluminum maker, is reducing staff.
"The economic fundamentals remain weak," said Shinji Kunibe, a Tokyo-based senior money manager at JPMorgan Asset Management Japan Ltd. He said he plans to add to his holdings of 10 and 30-year Treasuries this year.
Ten-year note yields declined two basis points to 2.42 percent as of 8:42am in London, according to BGCantor Market Data. The price of the 3.75-percent security maturing in November 2018 rose US$1.56 per US$1,000 face amount. Two-year notes yields also slid two basis points to 0.81 percent. Ten-year notes yield 1.61 percentage points more than two-year securities. Demand for the extra interest offered by longer maturities narrowed the spread from 1.72 percentage points at the start of the week.
Investor appetite for safety spread to bills, keeping the three-month rate below 0.1 percent for three days, falling from 1.79 percent six months ago. Bills are seen as among the safest securities because of their short maturities.
The MSCI World Index of global shares fell 0.2 percent, declining for a third day. Futures on the Standard & Poor's 500 Index fell 0.5 percent.
The US dollar headed for a weekly loss against the yen before the report. The US currency fell to 91.24 yen from 91.83 at the end of last week.
The projected 525,000 in job losses, based on the median estimate of 73 economists surveyed by Bloomberg News, would bring last year's payroll drop to 2.4 million. The unemployment rate jumped to 7 percent, the most since 1993, the survey showed. Treasuries are down 1.1 percent so far in 2009, according to Merrill Lynch & Co's US Treasury Master index, on concern US borrowing will rise to record levels as the government tries to spur the economy.
Ten-year notes headed for a third weekly decline, the longest run of losses since September.
Notes have trimmed losses from the start of 2009 as investors sought the relative safety of government debt on concern the US recession is worsening. Retailers including Wal-Mart Stores Inc and Macy's Inc cut earnings forecasts, while Alcoa Inc, the largest US aluminum maker, is reducing staff.
"The economic fundamentals remain weak," said Shinji Kunibe, a Tokyo-based senior money manager at JPMorgan Asset Management Japan Ltd. He said he plans to add to his holdings of 10 and 30-year Treasuries this year.
Ten-year note yields declined two basis points to 2.42 percent as of 8:42am in London, according to BGCantor Market Data. The price of the 3.75-percent security maturing in November 2018 rose US$1.56 per US$1,000 face amount. Two-year notes yields also slid two basis points to 0.81 percent. Ten-year notes yield 1.61 percentage points more than two-year securities. Demand for the extra interest offered by longer maturities narrowed the spread from 1.72 percentage points at the start of the week.
Investor appetite for safety spread to bills, keeping the three-month rate below 0.1 percent for three days, falling from 1.79 percent six months ago. Bills are seen as among the safest securities because of their short maturities.
The MSCI World Index of global shares fell 0.2 percent, declining for a third day. Futures on the Standard & Poor's 500 Index fell 0.5 percent.
The US dollar headed for a weekly loss against the yen before the report. The US currency fell to 91.24 yen from 91.83 at the end of last week.
The projected 525,000 in job losses, based on the median estimate of 73 economists surveyed by Bloomberg News, would bring last year's payroll drop to 2.4 million. The unemployment rate jumped to 7 percent, the most since 1993, the survey showed. Treasuries are down 1.1 percent so far in 2009, according to Merrill Lynch & Co's US Treasury Master index, on concern US borrowing will rise to record levels as the government tries to spur the economy.
Ten-year notes headed for a third weekly decline, the longest run of losses since September.
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