Reuters logo
3 years ago
TREASURIES-Prices rise on European stock losses, U.S. earnings
October 20, 2014 / 2:21 PM / 3 years ago

TREASURIES-Prices rise on European stock losses, U.S. earnings

* Poor quarter results knock Dow, European stock markets

* Benchmark yields fall after five straight weeks of decline

* Worries about Ebola, ISIS add to safety bids for bonds

* Fed's Fisher sees QE3 ending later in October-CNBC

By Richard Leong

NEW YORK, Oct 20 (Reuters) - U.S. Treasuries prices rose on Monday as weakness in U.S. and European equities markets and bets the Federal Reserve would delay possible plans to raise interest rates in 2015 stoked bids for low-risk government debt.

Safe-haven demand stemming from anxiety over the spreading of the Ebola virus and Islamic State-led fighting in the Middle East has persisted to keep benchmark yields not far above 2 percent.

Wall Street shares prices opened lower and European stocks declines on disappointing results from IBM and German business software maker SAP respectively.

"It's a bit of a risk-off trade today, which is supportive of Treasuries," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York.

Benchmark 10-year Treasuries yield was last up 8/32 in price with a yield of 2.167 percent, down 3 basis points from late on Friday.

The 10-year yield just posted five straight weeks of declines, matching a streak previously seen in late December into January, according to Reuters data.

Last Wednesday the 10-year yield tumbled to a 16-month low of 1.865 percent as anxiety about global growth triggered a stampede of buying in Treasuries to exit short bets against them.

"Both the Ebola scare and the expansion of ISIS have added jitters to the market and fear bids into the bond market," Milstein said.

Data released late Friday showed speculative net short positions in Eurodollar futures <0#ED:> fell to their lowest level since February last Tuesday, while net speculative shorts in 10-year T-note futures <0#TY:> rose from the prior week, a day before the short-covering rally occurred.

Amid the volatile trading last week, a few top Fed officials suggested the U.S. central bank may want to consider prolonging its third round of quantitative easing in a bid to support the domestic economy. Those comments surprised the market as the consensus view has been the Fed would decide to wrap its bond purchases for QE3 at its Oct 28-29 policy meeting.

Early Tuesday, Dallas Federal Reserve President Richard Fisher told CNBC television last week's turbulent trading should not stop the Fed from ending QE3. (Reporting by Richard Leong; Editing by Meredith Mazzilli)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below