Reply #85: 10-year yields flirting with 4.90% [View All]

[UpInArms]

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B2DA4D27A%2DB89A%2D4F8E%2D841D%2DB05E6ECD2FC2%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) - Treasury prices were held lower Monday by a stronger-than-anticipated inflation warning in an otherwise soft reading on the factory sector.

The Institute for Supply Management said its March sentiment index fell to 55.2% from 56.7% in February, below the 57.3% expected. The reading is still well above the 50% cutoff that indicates a growing factory sector. See Economic Report.

The price paid index rose to a four-month high of 66.5% from 62.5%, ISM said.

Yields on the benchmark 10-year note had broken through the 4.90% level in overnight trades, before "short-covering and bottom-fishing stabilized the market," analysts at Action Economics wrote.

In recent trades, the 10-year was yielding 4.87%, up two basis points from
Friday's close at 4.85%. The 10-year has not closed above 4.90% for nearly four years.

Demand was strong for the weekly auction of bills, indicating some investors are taking a defensive stance by switching to cash.

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