Feb. 7 (Bloomberg) -- Treasuries fell for a third straight week after the government’s announcement of a record $67 billion in note and bond sales overshadowed the biggest monthly decline in payrolls since 1974.
Yields on the benchmark 10-year note touched the highest in more than two months as the government set the auctions for next week and concern mounted that debt sales will damp demand. President Barack Obama lobbied lawmakers to pass his economic recovery plan, which may cost about $900 billion. Treasuries lost money this year amid concern government borrowing will skyrocket.
“Supply accommodation is the one thing that has been driving the market over the last week,” said David Ader, head of U.S. interest-rate strategy at Greenwich, Connecticut-based RBS Greenwich Capital Markets, one of 17 primary dealers that trade with the Federal Reserve. “It will be the story for the week to come, and the next couple of weeks. The market is nervous about the auctions and anxious about buyers.”
The 10-year note’s yield rose 14 basis points, or 0.14 percentage point, this week to 2.99 percent, according to BGCantor Market Data. It touched 3 percent yesterday, the most since Nov. 28. The price of the 3.75 percent security due in November 2018 tumbled 1 1/4, or $12.50 per $1,000 face amount, to 106 13/32. Yields on the two-year note rose five basis points. They touched 1 percent yesterday, near the highest since Dec. 8.
The difference between yields on notes maturing in two and 10 years touched 2 percentage points yesterday. That was the widest since Nov. 24, after the U.S. said it would rescue Citigroup Inc. with an injection of capital and guarantees for troubled assets. The gap was 1.25 percentage points on Dec. 26.
‘Tug of War’
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