Treasuries Decline as Russia May Pare Holdings of U.S. Debt

Source: Bloomberg

By Dakin Campbell and Dan Kruger

June 10 (Bloomberg) -- Treasuries fell, pushing 10-year yields to the highest level since November, as the government prepared to sell $19 billion in the securities and Russia said it may switch some of its reserves from U.S. debt.

Thirty-year bond yields reached the most in a year after a Russian central bank official said the nation may buy International Monetary Fund bonds. The Federal Reserve bought $3.5 billion in debt maturing in 2019 through 2026. Today’s auction is the second of three sales this week that will raise $65 billion, part of the U.S.’s record borrowing program.

“We’ve got $19 billion to bid on at 1 o’clock, and then we’ve got bonds following tomorrow,” said Brian Edmonds, head of interest rates at Cantor Fitzgerald LP in New York, one of 16 primary dealers that trade with the Fed. “I think we’ll probably be under a lot of pressure.”

The yield on the 10-year note rose five basis points, or 0.05 percentage point, to 3.90 percent at 11:29 a.m. in New York, according to BGCantor Market Data. The 3.125 percent security maturing in May 2019 declined 3/8, or $3.75 per $1,000 face amount, to 93 20/32.

The 30-year bond yield rose six basis points to 4.72 percent. It earlier touched 4.73 percent, the highest in a year. The government is scheduled to sell $11 billion of the securities tomorrow.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=afOPQYM_2Zuk

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