(Bloomberg) — Treasuries fell for the first time in a week before Federal Reserve policy makers begin a two-day meeting tomorrow at which they are forecast to further scale back bond purchases they have used to support the economy.
The 30-year bond yield rose from a nine-month low as stock futures gained before a nonfarm payrolls report this week forecast to show employees added the most jobs since November. The Treasury is forecast to borrow just more than $130 billion in coupon-bearing debt this quarter and may cut back on two- and three-year note auction sizes, according to Wrightson ICAP. Yields dropped last week amid simmering conflict between Russia and Ukraine.
“Equities have bounced and Treasuries are under pressure,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut. “It’s a reversal from Friday’s price action. We expect another $10 billion in tapering.”
Benchmark 10-year yields increased two basis points, or 0.02 percentage point, to 2.68 percent as of 9:20 a.m. in New York, based on Bloomberg Bond Trader prices, the first rise in six days. The 2.75 percent note due in February 2024 fell 5/32, or $1.88 per $1,000 face amount, to 100 19/32.
While the yield was more than a full percentage point from the record-low 1.379 percent reached in July 2012, it was still below its 10-year average of 3.45 percent.
Thirty-year bond yields rose two basis points to 3.47 percent. The yield dropped to 3.42 percent on April 25, the lowest level since July 3.
The Bloomberg Global Developed Sovereign Bond Index has risen 1 percent in April. It is up 3.7 percent in 2014, or triple the 1.1 percent gain from the MSCI All-Country World Index of shares, which includes reinvested dividends. Treasuries maturing in 10 years or longer have gained 2 percent this month and 9.4 percent this year, according to Bloomberg U.S. Treasury Bond Index data.
The difference between two- and 30-year yields narrowed to 2.99 percentage points on April 25, the least since June. The spread was 3.03 percentage points today.