TREASURIES-Bonds down on strong data, record auction schedule
Reuters, February 18, 2010
* Bonds down on firm data, looming supply
* Treasury announces record $126 bln in bond auctions
* 30-year long bonds down nearly a point
U.S. Treasuries fell on Thursday after data suggested the economy's tepid recovery from the worst recession in decades remained on track and the government announced a record amount of bonds for its auctions next week.
Separate reports showed unexpectedly strong producer price inflation nationwide, robust manufacturing conditions in the Mid-Atlantic region and the 10th month of gains for a gauge of the economy's future prospects.
The government said it would auction a record $126 billion in coupon debt next week, including the first sale of 30-year Treasury Inflation Protected Securities.
Though the supply figures were in line with expectations, they still weighed on the market as traders sought to push down prices to attractive levels for the auctions.
"The U.S. government is going to continue to have refunding needs, so if you don't like the price now, wait until next month or whenever; we will see more concessions going forward," said Michael Skinner, a bond trader at Wall Street Access in New York.
Balanced against all of this bond-negative news, however, was government data showing an unexpected jump in weekly claims for jobless benefits, which kept alive worries that the moribund labor market could still slow the recovery.
The benchmark 10-year note was last down 17/32 in price, yielding 3.80 percent versus Wednesday's close of 3.73 percent.
The 30-year long bond US30YT=RR was down nearly a point in price, last trading 28/32 lower on the day, yielding 4.76 percent.
Treasury's announcement topped the previous record for a week's worth of auctions, which was $123 billion set in October.