Bloomberg News

Treasury Futures Fall as Greek Poll Eases Safety Bid

May 27, 2012

Treasury futures fell, eroding gains made at the end of last week, as opinion polls in Greece showed voters back parties that support the European Union’s bailout, easing concern the nation will leave the currency bloc.

Bond futures slid and Asia stocks advanced as demand for the relative safety of government debt ebbed. Greece’s New Democracy party, which supports the plan negotiated with international lenders, placed first in all six opinion polls published on May 26 as candidates campaigned for an election next month.

“It’s a relief,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third- largest publicly traded bank by assets. “It’s negative for the Treasury market.”

Ten-year futures contracts for June delivery slid 6/32, or $1.88 per $1,000 face amount, to 133 18/32 as of 9:55 a.m. in Singapore. They rose 7/32 on May 25.

Cash trading of Treasuries is closed today for the Memorial Day holiday in the U.S., according to the Securities Industry and Financial Markets Association in New York.

U.S. government securities returned 1 percent this month as of May 25, Bank of America Merrill Lynch indexes show, reflecting demand for the haven of Treasuries. Investors who track the MSCI All-Country World Index of stocks lost 8.3 percent in the same period, including reinvested dividends.

The MSCI Asia Pacific Index (MXAP) of stocks rose 0.4 percent today, set for the first advance in four days.

Japan’s 10-year rate slid one basis point, or 0.01 percentage point, to 0.875 percent today. It was as low as 0.815 percent on May 18, a level not seen since 2003.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.

To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net


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