NEW YORK Nov 20 Longer-dated U.S. Treasuries
prices extended earlier gains on Wednesday in the wake of a
report the European Central Bank is considering making banks pay
to deposit funds with it overnight, spurring demand for
higher-yielding U.S. bonds.
The European Central Bank is considering making banks pay to
deposit cash with it overnight, news agency Bloomberg said on
Wednesday, citing unnamed sources.
"If it were true and if the ECB does it, it's positive for
Treasuries," said Thomas Roth, executive director of U.S.
government bond trading at Mitsubishi UFJ Securities USA in New
A negative rate might disrupt money markets as European
banks scramble to put their cash elsewhere to avoid paying a
charge to the ECB, according to Roth.
Benchmark 10-year Treasuries notes last traded
4/32 higher in price with a yield of 2.696 percent, down about 2
basis points from late on Tuesday. They had traded up as high as
8/32 in price with a yield of 2.685 percent after the Bloomberg
report was published.
The 10-year German Bunds were up 5 basis points
in price to yield 1.713 percent, which was down 1 basis point
from Tuesday's close.