July
2007
U.S. benchmark yield falls below 5%
Ten-year yield drops below milestone for the first time since June 6; market awaits reports due next week.
July 20 2007: 10:11 AM EDT
NEW YORK (CNNMoney.com) — Bonds gained Friday morning, sending the 10-year yield below 5 percent for the first time in more than a month.
The dollar edged up slightly against the euro and yen.
The 10-year benchmark Treasury gained 13/32, or $4.06 on a $1,000 note, to yield 4.96 percent, down from 5.02 Thursday. The last time the yield was below 5 percent was June 6, according to information from Thomson Baseline.
A mix of hard data and anecdotal evidence have underpinned a week-long rally, while Federal Reserve Chairman Ben Bernanke’s testimony, which referred extensively to the problem in the subprime mortgages sector, only added fuel.
The 30-year bond gained 15/32, or $4.68 on a $1,000 note, to yield 5.07 percent, down from 5.11. Bond prices and yields move in opposite directions.
The five-year bill added 6/32 to yield 4.87 percent, while the two-year gained 2 ticks to yield 4.81 percent.
On the data side, permits for residential buildings have collapsed to their lowest level in a decade, while homebuilder sentiment continues to plummet. At the same time, troubled mortgage investments have led to a string of incidents that have made markets leery that capital might dry up.
A far-flung hedge fund blow was now hitting close to home as Australia’s Basis Capital warned investors they may only get half their money back. The fund was hard-hit by subprime mortgage woes in the United States.
Meanwhile, S&P on Thursday slashed the ratings on a string of mortgage securities.
The market will look to existing home sales, crude inventories and consumer sentiment reports for direction next week. No economic reports are on tap Friday.
In currency trading, the euro bought $1.379, down from $1.3801 Thursday, while the dollar bought ¥122.08, up from ¥122.07.
Related Articles:
Sponsored By:
- No sponsors for this posts.
Discussion 
Leave a Comment
Speak Your Mind
Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!
