TREASURIES-30-year bond falls full point in curve steepening

Wed Apr 23, 2008 10:58am EDT
 
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(Updates with long bond price falling full point)

NEW YORK, April 23 (Reuters) - The 30-year U.S. Treasury bond US30YT=RR fell over a full point in price on Wednesday in curve-steepening trades and rising concerns about growing inflation.

Traders moved to widen the spread between shorter-dated government debt yields and longer-dated debt yields in an effort to steepen the Treasury curve. The spread between 2-year note yields and 10-year note yields rose to 154 basis points on Wednesday from 149 basis points on Tuesday.

Worries about rising inflation also were hitting the long bond, as inflation erodes a bond's value over time.

"The long end is being hammered," said Thomas di Galoma, head of government trading at Jefferies & Co in New York, adding "the market doesn't seem to be worried about more bank write-downs, the market is worried about inflation -- that seems to be new story."

The 30-year bond was trading 1-1/32 lower in price for a yield of 4.52 percent from 4.45 percent late on Tuesday, while the benchmark 10-year note US10YT=RR was trading 11/32 lower for a yield of 3.74 percent from 3.70 percent. (Reporting by Chris Reese; additional reporting by Richard Leong; Editing by James Dalgleish)

 
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