la zona topica resistette , ora bisogna vedere se hanno la forza di buttarsi nel gap, sul 10y sui minimi son partite bordate notevolissime in acquisto
U.S. Treasuries Decline as Factory Orders for May Increase
July 5 (Bloomberg) -- U.S. Treasuries fell as a government report showed factory orders in May increased by the most in a year, reinforcing the Federal Reserve's view the economy can withstand higher interest rates.
The release and others this week on jobs may add to expectations the Fed will continue to lift rates after policy makers last week raised the target for overnight loans between banks a quarter percentage point to 3.25 percent, the ninth straight increase. The bank again said it can boost short-term borrowing costs at a ``measured'' pace.
``The market is beginning to realize that the economic data is not as weak as was priced in and that the Fed is not at a point where they are going to pause anytime soon,'' said Sharon Stark, chief fixed-income strategist at Legg Mason Wood Walker Inc. in Baltimore.
The yield on the benchmark 10-year Treasury rose 4 basis points, or 0.04 percentage point, to 4.08 percent as of 10:03 a.m. in New York, according to bond broker Cantor Fitzgerald LP. The yield reached 4.10 percent, the highest in two weeks. The yield, which moves inversely to the note's price, is up from last week's low of 3.89 percent.
The price of the 4 1/8 percent note due May 2015 declined 5/16, or $3.13 per $1,000 face amount, to 100 11/32. Legg Mason predicts that the Fed will raise its interest rate to 3.75 percent by the end of this year and that the note's yield will rise to between 4.4 percent and 4.5 percent.
Factory orders increased 2.9 percent in May, compared with a gain of 0.9 percent a month earlier, the Commerce Department said in Washington. A reading 3 percent was expected, according to the median estimate of 53 economists in a Bloomberg survey.
Treasuries were also lower today along with European government debt after Market News International said the European Central Bank, which meets July 7, won't cut its benchmark rate from 2 percent. Speculation of a reduction helped spur a rally in U.S. and European bonds last month. Ten-year German bund yields rose 5 basis points to 3.21 percent.
Manufacturing
Ten-year Treasuries fell the most this year on July 1, with yields surging 14 basis points, after the Institute for Supply Management said its monthly manufacturing index advanced for the first time since December.
The ISM factory index climbed to 53.8 in June from 51.4 the month before. Economists had forecast the index to be unchanged. A component of the survey showed that inventory levels held at their lowest level this year.
``If the ISM is telling us correctly that the inventory slowdown is over, then it is quite likely that bond yield will rise,'' said Jim O'Neill, head of global economic research at Goldman Sachs Group Inc. in London.
U.S. employers probably added 192,000 workers to payrolls in June compared with an increase of 78,000 in May, according to the median estimate of 57 economists in a Bloomberg survey. The monthly average has been 179,600 this year. The Labor Department will release the figures on July 8.
Fed Target
``We continue to look for a 4.25 percent year-end funds rate target and a 5 percent rate by the middle of next year,'' economists at Bear Stearns & Co in New York led by John Ryding said in a research report dated July 1. ``The bond market is significantly underestimating the degree of rate adjustment that lies ahead.''
Ried, Thunberg & Co.'s weekly index of investor sentiment toward Treasuries through September rose to 46 last week from 43 a week earlier. A number below 50 signals expectations for a decline. The 36 international investors polled by the Jersey City, New Jersey-based bond research firm manage $1.34 trillion.
Relative Value
Any decline in Treasuries may be tempered by international investors buying U.S. debt in search of higher yield.
Ten-year Treasuries yield 88 basis points more than German government bonds with the same maturity. As recently as September, there was no difference in the yield. U.S. 10-year notes yield 283 basis points more than 10-year Japanese government bonds, up from 250 basis points in September.
``European yields have risen along with U.S. yields but not at the same pace,'' said Peter Scobie, who helps manage the equivalent of $2.4 billion in cash and bonds at AMP Capital Investors (NZ) in Wellington. ``That makes U.S. Treasuries appear better value.'' Ten-year yields may fall to 4 percent this week, he said.
Yields on December Eurodollar futures traded at 4.115 percent, up from 3.825 percent a month ago. The contract shows traders are increasing expectations about how high Fed policy makers will raise the overnight target rate in 2005.
The futures settle at a three-month lending rate that has averaged 21 basis points more than the Fed's target over the past 10 years.
``The real pessimists, those that believe there are no inflation pressures and that growth is deteriorating are slowly being proved wrong,'' said Jon Lee, a fixed-income strategist in London at Barclays Capital, the investment-banking unit of Barclays Plc. ``We're looking for higher yields.''
Ten-year U.S. yields may rise to 4.75 percent by the end of the year, said Lee.
:smile: 
