Bloomberg News

Treasuries Pare Drop on Italian Auction, ECB Bond Buying Outcome

November 29, 2011

Nov. 29 (Bloomberg) -- Treasuries pared their drop after Italy fell short of the maximum target in its three-year debt auction and the European Central Bank failed to fully offset the extra liquidity created by its bond purchase program.

U.S. debt securities were also supported as American Airlines parent AMR Corp. filed for bankruptcy after failing to secure cost-cutting labor agreements.

“The thing we’ll remember is that the new three-year was issued at 7.89 percent, a really big yield,” said Peter Chatwell, a fixed-income strategist at Credit Agricole SA. “It shows that the supply problem still very much exists within the euro sovereign market” he said. AMR “helped the bid go,” Chatwell said.

The yield on the U.S. 10-year note increased one basis point, or 0.01 percentage point, to 1.99 percent after earlier rising four basis points.

To contact the editor responsible for this story: Dennis Fitzgerald at dfitzgerald5@bloomberg.net


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