Bloomberg News

Treasuries Remain Lower After Report Shows Manufacturing Rose

January 04, 2012

Jan. 3 (Bloomberg) -- Treasury 10-year notes fell for the first time in five days as a report showed manufacturing in the U.S. expanded, damping demand for the safety of government debt.

Longer-maturity bonds led losses as stocks rose globally amid signs economic growth is improving. A report later this week is forecast to show the job market improved, threatening to end a rally that pushed Treasuries up last year by the most since 2008. Data this week showed manufacturing in Germany, China and Australia expanded, adding to evidence of stronger global growth. Ten-year yields rose above those on similar- maturity German bunds.

“People are more optimistic,” said Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, one of 21 primary dealers that trade Treasuries with the Federal Reserve. “The data in the U.S. has been generally better than expected. That’s reflected in the prices.”

The 10-year yield rose 8 basis points to 1.96 percent at 10:02 a.m. in New York, according to Bloomberg Bond Trader prices. The 30-year yield climbed 10 basis points to 2.99 percent.

The Institute for Supply Management’s factory index climbed to 53.9 in December. U.S. payrolls rose by 150,000 in December, after a 120,000 gain in November, a separate survey showed ahead of the data on Jan. 6.

China’s purchasing managers’ index was increased to 50.3 from 49 in November, the logistics federation said Jan. 1. In Germany, the index for December was revised to 48.4 from 48.1, Markit Economics said yesterday. Australia’s manufacturing index climbed to 50.2 last month from 47.8 in November, the Australian Industry Group and PricewaterhouseCoopers LLP said.

--Editors: Kenneth Pringle, Dave Liedtka

To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net


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