ammazza che ritraccio
Treasuries ease in retrenchment from recent rally
Tue Sep 26, 2006
By Chris Reese
NEW YORK, Sept 26 (Reuters) - U.S. Treasury debt prices eased on Tuesday after a three-month price rally that investors said has pushed yields down to levels that are stalling further price gains.
Benchmark yields, which move inversely to prices, hit 7-month lows on Monday, and an increasing number of investors say a price rally which began in late June may have run its course.
"I do think the yield levels in general are too low -- you do need active buying to keep them at these levels, which we haven't seen this morning," said Adam Brown, director of Treasury trading at Barclays Capital in New York.
The benchmark 10-year note <US10YT> was trading 6/32 lower in price for a yield of 4.57 percent from 4.54 percent late on Monday.
The benchmark yield has fallen from about 5.25 percent in late June, with steadily rising prices, as investors have been betting a slowing U.S. economy will mean the Federal Reserve will continue to hold on any interest rate increases, and could even begin cutting rates next year.
Yields may have fallen to a point where they are bumping against technical levels that could limit any further price gains, and may mean price losses, some analysts said.
"Investor enthusiasm grows more cautious as the 10 year nears 4.5 percent," said William O'Donnell, head of U.S. interest rate strategy and research with UBS in Stamford, Connecticut.
"Overnight flows were light in Asia as anecdotes surface that portfolios will target 4.50 percent in U.S. 10 years as a place to lighten up on longs," O'Donnell said, adding "short-term technical conditions are once again at odds with our longer-term fundamental bullish view."