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TREASURIES-U.S. 10-yr yield hits 9-mth high after upbeat data
February 4, 2013 / 2:10 AM / 5 years ago

TREASURIES-U.S. 10-yr yield hits 9-mth high after upbeat data

SINGAPORE, Feb 4 (Reuters) - The U.S. 10-year Treasury yield hit a nine-month high on Monday after jobs and manufacturing data on Friday showed the U.S. economy’s recovery remained on track and helped lift equities to five-year highs.

* Ten-year Treasuries fell about 7/32 in price to yield 2.052 percent. That was the U.S. 10-year yield’s highest level since mid-April of last year.

* U.S. employment grew modestly in January and job gains in the previous two months were larger than first reported, while factory activity hit a nine-month high in January, data released on Friday showed.

Safe haven Treasuries came under pressure after the data sparked a stock market rally on Friday, when the Standard & Poor’s 500 Index touched its highest level since December 2007.

* “It is hard to be all that bullish (on Treasuries) at this point,” said Tomohisa Fujiki, interest rate strategist at BNP Paribas in Tokyo.

However, uncertainty related to forthcoming federal spending cuts, as well as over whether consumer spending will hold firm in the wake of a recent payroll tax increase, might help limit rises in Treasury yields, Fujiki said.

* Across-the-board federal spending reductions were postponed for two months as part of a deal that ended the “fiscal cliff” standoff at the beginning of the year.

According to a Reuters poll on Friday, economists at 11 of 13 primary dealers - large financial institutions that do business directly with the Federal Reserve - said they expect some form of the spending cuts to begin on March 1.

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