April 23, 2013 / 8:06 PM / 5 years ago

TREASURIES-Bond prices surge briefly after false explosion tweet

* Prices spike after fake report of White House explosions
    * U.S., China, Germany factory data stoke growth concerns

    By Richard Leong and Leah Schnurr
    NEW YORK, April 23 (Reuters) - U.S. Treassuries were little
changed on Tuesday after surging briefly on a fake Twitter
message from a hacked Associated Press account claiming
explosions at the White House.
    The tweet, which an AP spokesman called "bogus," raised
concerns of another terror attack just a week after the Boston
Marathon bombs and caused a short-lived scramble for safe-haven
U.S. bonds. 
    When the AP tweet was retracted, buying of Treasuries faded,
sending prices back to little changed.
    In an otherwise uneventful day for the bond market,
benchmark 10-year Treasury notes were down 2/32 to 
102-23/32 in mid-afternoon trading to yield 1.701 percent.
    The 10-year yield dropped to 1.643 percent after the false
AP tweet circulated among traders, hitting its lowest intraday
level since Dec. 12, according to Reuters data.
    "When you have this story print when you're at the lows of
the day (in price) and it takes you back to the highs of the day
(in price), you've done a tremendous amount of damage in very
little time," said Sean Murphy, Treasuries trader at Societe
Generale in New York.
    Murphy said prior to this traders were likely building short
positions in expectation of a move higher in yields, but the
sharp move caused those positions to unwind quickly.
    Earlier, Treasury yields were hovering near their lowest
levels of the year as data suggested another spring global
slowdown, which major central banks might have to ward off with
more stimulus.
    A round of business surveys on Tuesday showed major
economies around the world lost some momentum this month. Among
the day's data, U.S. manufacturing grew at its most sluggish
pace in six months. 
    The 30-year bond was little changed at 104-21/32
to yield 2.890 percent. The 30-year yield fell to 2.823 percent
earlier, the lowest level since Dec. 12.
    Concerns about deteriorating economic growth worldwide,
together with bets that Japanese investors will buy more U.S.
and other higher-yielding foreign bonds, have limited the rise
in yields the past couple of weeks.
    Investors also speculated the European Central Bank could be
leaning toward cutting interest rates after comments from
policymakers stressing falling inflation and poor growth
    The day's weak data out of the euro zone added to that view,
as Germany's services sector shrank. The ECB meets next week.
    "It's clear that there's still a lot of issues and weak
growth on the continent. It (would be) another measure to show
they're being proactive," said Justin Lederer, Treasury
strategist at Cantor Fitzgerald in New York.
    "A lot of people in general are looking more for June but
now it could come as soon as next week, given where the German
data was overnight," said Lederer.

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