Bloomberg News

Treasury 10-Year Notes Fall, Yield Rises 3 Basis Points

May 18, 2012

Treasuries declined, with benchmark 10-year notes snapping a two-day gain.

The yield on the 10-year security climbed three basis points, or 0.03 percentage point, to 1.73 percent at 9:13 a.m. in London, according to Bloomberg Bond Trader prices. The 1.75 percent security due in May 2022 fell 1/4, or $2.50 per $1,000 face amount, to 100 6/32.

Benchmark notes headed for a ninth weekly gain after Moody’s Investors Service cut the credit ratings of 16 Spanish banks, citing economic weakness and the government’s mounting budget strain. Government bonds in Germany and Japan also rallied as Fitch Ratings downgraded Greece on concern the nation's politicians will fail to adhere to the terms of its bailout agreements.

``The U.S. is the favorite safe haven,'' said Hiromasa Nakamura, who helps oversee the equivalent of $41.4 billion in Tokyo as an investor for Mizuho Asset Management Co., a unit of Japan's largest publicly traded bank. ``There's a flight to quality. The world economy is declining. Recently the rally has gained strength.''

To contact the editor responsible for this story: Nicholas Reynolds at nreynolds2@bloomberg.net


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