Oct. 19 (Bloomberg) -- Treasury 10-year notes snapped a loss from yesterday after a Moody’s Investors Service downgrade of Spain’s credit rating added to concern that Europe’s sovereign-debt crisis is spreading.
Ten-year yields were about half a percentage point away from a record low as France and Germany strive to reach an agreement on bolstering a European bailout fund. The Federal Reserve is scheduled to buy $4.25 billion to $5 billion of Treasuries maturing from October 2017 to August 2019 today, according to the central bank’s website, as part of its plan to keep borrowing costs down.
“This is a pretty long, hard slog for Europe,” said Su- Lin Ong, head of Australian economic and fixed-income strategy at RBC Capital Markets in Sydney. “That will definitely cap any further backup in U.S. yields.”
Benchmark 10-year rates were little changed at 2.17 percent as of 6:29 a.m. in London, according to Bloomberg Bond Trader prices. The 2.125 percent security due in August 2021 changed hands at 99 18/32.
The notes were up as much as 7/32, or $2.19 per $1,000 face amount, in Asian trading.
The rate dropped to a record low of 1.6714 percent on Sept. 23.
--Editors: Jonathan Annells, Rocky Swift
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