NEW YORK, July 23 (Reuters) - The prices of U.S. Treasuries erased their early losses on Friday, turning flat as investors sought a safe haven amid new concerns about the rigor of the European bank stress tests.
U.S. and European markets have been hotly anticipating the release of a European Union report on 91 European banks, set for noon (1600 GMT). The stress tests were designed to provide investors with a clearer picture of how the recent sovereign debt crisis had affected eurozone financial institutions.
Traders said news that the bank stress tests only examined a portion of the banks’ assets threw an element of uncertainty into the marketplace. [ID:nLDE66M1EC]
“This is a surprise in the sense that the scope of the stress test is limited to a certain portion of the banks’ risk,” said Christian Cooper, senior rates trader at Jefferies & Co. in New York. “It’s going to be a little bit less insightful or meaningful than the already watered-down expectations,”
The benchmark 10-year Treasury note US10YT=RR was off 3/32 in price and yielding 2.95 percent. The 30-year Treasury bond US30YT=RR was off 6/32 in price and yielding 3.96 percent. (Reporting by Emily Flitter; Editing by Theodore d’Afflisio)