Tags: US | Credit | Markets

Interest Rates Rise After Positive Economic News

Thursday, 22 Apr 2010 03:36 PM

Interest rates rose in the bond market Thursday after reports on jobs and housing showed the economy is continuing to get better.

Signs of economic growth often send Treasury prices lower as the market anticipates higher interest rates down the road, which would hurt the returns on bonds.

Investors were also seeking safety as Greece's debt crisis worsened. New results from the European statistical agency showed that Greece's deficit was even worse than expected last year. Moody's also downgraded the country's debt.

The yield on the benchmark 10-year Treasury note maturing in February 2020 rose to 3.78 percent in afternoon trading Thursday from 3.74 percent Wednesday. Its price fell 11/32 to 98 22/32. The yield on the 10-year note is linked to rates on mortgages and other consumer loans.

The Labor Department's weekly update on jobless claims showed the number of people applying for unemployment benefits dipped to 456,000 last week, after rising unexpectedly the past couple of weeks. The drop was about inline with expectations.

Also, the National Association of Realtors said home sales rose 6.8 percent last month after falling 0.8 percent in February. Sales of previously occupied homes had been expected to rise 5.2 percent, according to Thomson Reuters.

In other trading, the yield on the two-year note that matures in March 2012 rose to 1.04 percent from 1.01 percent. Its price fell 2/32 to 99 30/32.

The yield on 30-year bond that matures in February 2040 rose to 4.65 percent from 4.62 percent, while its price fell 13/32 to 99 21/32.

The yield on the three-month T-bill that matures July 22 rose to 0.15 percent from 0.14 percent.

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Interest rates rose in the bond market Thursday after reports on jobs and housing showed the economy is continuing to get better.Signs of economic growth often send Treasury prices lower as the market anticipates higher interest rates down the road, which would hurt the...
US,Credit,Markets
272
2010-36-22
Thursday, 22 Apr 2010 03:36 PM
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