TREASURIES-Bonds dip on profit-taking as worries linger
* Investors book profits before $99 bln in supply * Greece, Spain crisis worries underpin prices * Benchmark yields fall for 9th week; longest slide since 1998 By Richard Leong NEW YORK, May 18 (Reuters) - U.S. Treasury debt prices slipped o n F riday as investors took profits a day after benchmark yields flirted with their lowest level in at least 60 years in this week's rally, fueled by anxiety over the euro zone debt crisis. Despite Friday's modest pullback, benchmark 10-year yields fell for a ninth consecutive week, matching a streak last seen in 1998, according to Reuters data. "We are at levels where most people would like to go short but they can't because of Europe," said Chuck Retzky, director of futures sales at Mizuho Securities USA in Chicago. Investors bought Treasuries, German Bunds and other low-risk assets this week as Greece's political turmoil and deterioration of the Spanish banking system fed worries that their financial problems could engulf the region and spiral into a global financial crisis. Major stock indexes were on track to post their worst week of the year. "Sentiments are still pretty negative," said Francis Rodilosso, portfolio manager with Market Vectors in New York. "People are definitely seeing the glass half-empty." Fears over a possible Greece exit from the euro zone grew after news German Chancellor Angela Merkel discussed with Greek President Karolos Papoulias on Friday whether his country should hold a referendum on staying in the euro. But the idea was vehemently rejected by Greece's two biggest parties. Fitch on Thursday downgraded Greece deeper into junk territory, citing the risk that it might leave the euro zone. Jitters about Europe's fiscal woes disrupting the global economy again also supported the notion the U.S. Federal Reserve and the European Central Bank would soon introduce more monetary stimulus, investors said. "The market is pricing in more unconventional measures," said Bill Irving, who oversees about $40 billion at Fidelity Investments in Boston. Benchmark 10-year Treasury notes last traded down 5/32 at 100-12/32 in price to yield 1.71 percent, up 2 basis points from Thursday. The 10-year yield finished at 1.69 percent, the lowest closing level in at least 60 years, according to Tradeweb. Thirty-year Treasury bonds last traded down 8/32 at 104-4/32 to yield 2.80 percent, up 1 basis points on the day. The yield touched its lowest level in five months on Thursday.
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