Bonds News

UPDATE 1-U.S. 10-Year Treasury note futures up after Italian referendum

(Updates with quote, adds Renzi resignation)

NEW YORK, Dec 4 (Reuters) - U.S. Treasury futures prices rose on Sunday after Italian voters were seen rejecting a change to the country’s constitution, which was designed to hasten the legislative process.

Ten-year Treasury note futures prices were up 0.25 percent shortly after electronic trading resumed on Sunday evening - paring gains from an earlier 0.35 percent rise - signaling that nominal Treasury yields might pull back from 18-month highs reached late last week.

Italian Prime Minister Matteo Renzi said he would resign following a referendum over his proposals for constitutional reform. Exit polls and early projections on Sunday showed Renzi lost the referendum by a wide margin.

“Treasuries are likely to be up in price, down in yield, as a result of the referendum as a “safe haven” investment with the dollar already up significantly versus the Euro,” said Mark Grant, Chief Strategist and Managing Director at Hilltop Securities.

Treasuries fell hard in November on bets that U.S. President-elect Donald Trump’s policies and higher oil prices would stoke inflation, which erodes bond prices. Last week 10-year yields rose for a fourth straight week, finishing at around 2.39 percent on Friday.

“Italy is a G7 country and third largest economy in euro zone and with a weak and troubled banking system,” said David Kotok, chairman and chief investment officer of Cumberland Advisors. “This is trouble for markets in Europe.” (Reporting by Jessica Resnick-Ault, Jennifer Ablan and Megan Davies; Editing by Chris Reese and Diane Craft)