(Bloomberg) — Treasury 30-year bonds fell for a third day as investors pared bets the Federal Reserve will push quickly to raise interest rates after comments yesterday by central-bank Chair Janet Yellen.
Prices on Treasuries declined as a gauge of U.S. manufacturing rose and data fueled speculation the euro region’s economic recovery is gathering pace, decreasing demand for the safest assets. A government report later this week will show the American economy added the most jobs this year, economists surveyed by Bloomberg forecast.
“People try to jump on a trend when it looks like it’s appearing,” said Michael Cloherty, head of U.S. interest-rate strategist at Royal Bank of Canada’s RBC Capital Markets unit in New York, one of 22 primary dealers that trade with the Fed. “It’s gone too far and will continue to steepen.”
The 30-year bond yield climbed four basis points, or 0.04 percentage point, to 3.60 percent at 10:04 a.m. in New York, according to Bloomberg Bond Trader data. The price of the 3.625 percent security maturing in February 2044 dropped 3/4, or $7.50 per $1,000 face amount, to 100 15/32. Five-year note yields rose two basis points to 1.74 percent.
The yield difference between five- and 30-year securities increased to 1.86 percentage points, steepening for a second day. It was 1.80 percentage points on March 28.
The benchmark 10-year note yield advanced four basis points to 2.75 percent.
The Institute for Supply Management’s index of U.S. manufacturing increased to 53.7 in March from 53.2 a month earlier, the Tempe, Arizona-based group reported today. Readings above 50 indicate growth. The median forecast in a Bloomberg survey of 81 economists was 54. Manufacturing accounts for about 12 percent of the economy.