On Monday Treasury yields edged higher paring last week's losses as falling commodity prices and recent U.S. economic data pushed investors to turn to bonds.
Commodities in general and crude-oil futures and gold in particular continued to fall Monday, after tumbling last week.
Nymex-traded crude-oil contracts for August delivery were lower 0.6% to $50.58 a barrel, while gold dropped 2% to $1.109, around its lowest level since 2009.
The yield on the 10-year Treasury was up 3.4 basis points to 2.383%,
while the yield on the two-year was up 3.6 basis points to 0.706%.
The yield on the 30-year
bond rose 3.4 basis points to 3.115%. Bond yields climb when prices drop.
With no important market-moving economic data expected, Monday’s move
in Treasurys appeared to have hardly been backed by fundamentals, according to analysts.
Some of the selloff in Treasurys was the result of
investors making room in their portfolios for an influx of corporate
debt expected later in the week, strategists say.
David Keeble, head of fixed-income strategy at Crédit Agricole, the spread between the 10-year yield and the yield on the 10-year German bund extended, as the bund yield dropped 2.6 basis points to 0.714% driven by thin trading volume and falling gold prices.
Sovereign bond yields in Portugal, Spain and Italy edged lower.
The spread shows the gap between the return on investment of U.S. and European bonds.
Elsewhere, the dollar kept its gains versus a basket of other major rivals. EUR/USD was last at 1.0850 higher 0.17%, as Greek optimism boosted appeal for the euro.
Greece has started repaying the ECB and IMF as banks reopen.
The IMF has confirmed that Greece has repaid its arrears, as had been expected after Greece got a bridging loan to cover its most pressing debts. Gerry Rice, the IMF’s director of communications said:
“I can confirm that Greece today repaid the totality of its arrears to the IMF, equivalent to SDR 1.6 billion (about €2.0bn). Greece is therefore no longer in arrears to the IMF."
“As we have said, the Fund stands ready to continue assisting Greece in its efforts to return to financial stability and growth.”
