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TREASURIES-U.S. yields fall as Greece worries resurface
June 8, 2015 / 2:37 PM / 2 years ago

TREASURIES-U.S. yields fall as Greece worries resurface

* Greece worries rekindle safety bids for U.S. bonds
    * U.S. to sell $58 bln 3-year, 10-year, 30-year debt
    * Heavy corporate supply seen capping Treasuries demand

    By Richard Leong
    NEW YORK, June 8 (Reuters) - U.S. Treasuries yields fell on
Monday with benchmark yields retreating from seven-month highs
as concerns about Greece and its ability to avert default
renewed safehaven demand for low-risk government debt.
    Greece and its creditors have not reached a deal so the
cash-strapped nation could obtain more funds. Greece delayed a
300 million euro payment to the International Monetary Fund last
week and rattled investors on Friday when its Prime Minister
Alexis Tsipras' outright rejected a proposal from lenders.
    Athens struck a more conciliatory tone on Monday, giving
some hopes that an agreement may be obtained by the end of June.
    "Greece is clearly a big issue. People are watching and
waiting," said John Herrmann, an interest rates strategist at
Mitsubishi UFJ Securities USA Inc. in New York.
    Greece-related safety bids provided a respite for the U.S.
bond market that came off its worst week in three months.
    A surprisingly strong payrolls report in May spurred selling
in Treasuries on May, resulting in 10-year yields to book their
largest single-week increase in nearly two years.
    The drop in yields will likely be limited as investors seek
to reduce their Treasuries holdings in anticipation of this
week's supply.
    The Treasury Department will sell a combined $58 billion in
three-year, 10-year and 30-year securities, starting Tuesday.
    Investors also face plenty of choices from the
higher-yielding corporate bond sector, analysts said.
    Companies are expected to sell about $30 billion in
investment-grade debt this year, according to IFR, a unit of
Thomson Reuters. 
    In early U.S. trading, the yield on benchmark 10-year
Treasuries notes last traded at 2.336 percent, down
3 basis points from late on Friday. It hit 2.442 percent on
Friday, which was the high since early October, according to
Tradeweb.
    The 30-year bond yield declined by about 3 basis
points to 3.084 percent, while the five-year yield 
fell 4 basis points to 1.699 percent.
   

 (Editing by Andrew Hay)

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