Treasuries fell for the first time in three days after Spain raised more than its maximum target at a bill auction and a German report showed investor confidence unexpectedly increased, damping demand for the safest assets.
Ten-year note yields climbed from the lowest level in six weeks after Spain sold 3.18 billion euros ($4.18 billion) of 12- and 18-month bills, compared with the target of 3 billion euros the nation’s Treasury set for the auction. The ZEW Center for European Economic Research in Mannheim said its index of German investor and analyst expectations climbed to the highest level since June 2010.
The yield on the 10-year note climbed one basis point, or 0.01 percentage point, to 2 percent at 10:25 a.m. in London, according to Bloomberg Bond Trader prices. The 2 percent security due in February 2022 dropped 3/32, or 94 cents per $1,000 face amount, to 100 1/32. The yield dropped to 1.94 percent yesterday, the least since March 6.
U.S. home starts rose to a 705,000 annual rate in March following a 698,000 pace the prior month, according to a Bloomberg News survey before the Commerce Department data today. Existing-home sales increased 0.7 percent last month, a separate survey showed ahead of the April 19 report by the National Association of Realtors.
Industrial production gained 0.3 percent in March after being little changed in February, economists said before the Federal Reserve releases the figure today.
“The U.S. economy keeps recovering modestly,” said Masaru Hamasaki, who helps oversee the equivalent of $22 billion as chief strategist at Toyota Asset Management in Tokyo. “Yields at current levels are too low.”
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