Treasury 10 Year Yields Reach Seven-Week High on Growth

by 13 May 2013

Treasury 10-year yields reached the highest level in almost seven weeks after a report showed U.S. retail sales unexpectedly increased in April, renewing optimism central-bank efforts to spur economic growth are working.

U.S. 10-year benchmark yields rose for a third day as European policy makers expressed a willingness to consider more ways to spur growth following weekend talks of the Group of Seven. Federal Reserve Bank of Philadelphia President Charles Plosser speaks today on the U.S. economy and monetary policy. A report May 17 is forecast to show consumer sentiment in May climbed to the highest level this year.

“It’s the wave of short-term positive economic sentiment that’s continuing here,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We’re likely to see some value buying as the 10-year comes in the mid-1.90 percent area, 1.94 percent is where buying is likely to step in.”

The U.S. 10-year yield increased two basis points, or 0.02 percentage point, 1.92 percent at 11:25 a.m. in New York, climbing to the highest level since March 26, according to Bloomberg Bond Trader prices. The 1.75 percent note due in May 2023 fell 5/32, or $1.56 per $1,000 face amount, to 98 1/2. The yield increased 16 basis points last week.

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