(Bloomberg) — Treasuries fell for the first time in five days as the U.S. prepared to sell $21 billion of 10-year notes an hour before the minutes of the Federal Reserve's last policy meeting are released.
The securities yielded 2.71 percent in trading before the 1 p.m. auction, compared with the 2.73 percent high yield at the last government sale on March 12. Treasuries have rallied since the March employment report released April 4 showed the U.S. added fewer jobs than forecast, easing concern the Fed would accelerate its winding down of monetary stimulus.
"The supply, the better tone of the equity market and the uncertainty about the Fed minutes are weighing on the market," said Adrian Miller, director of fixed-income strategies at GMP Securities LLC in New York. "The market has been very cautious, and wants to see what the minutes have to say as it continues to try to understand the Fed's intentions."
The benchmark 10-year yield rose two basis points, or 0.02 percentage point, to 2.70 percent as of 11:09 a.m. in New York, according to Bloomberg Bond Trader prices. The 2.75 percent note due in February 2024 fell 5/32, or $1.56 per $1,000 face amount to 100 13/32. The yield declined 12 basis points during the previous four days.
The Standard & Poor's 500 Index of stocks rose 0.2 percent.
Market view
"U.S. bonds are trading cheaper," said Craig Collins, managing director of rates trading at Bank of Montreal in London. "We do have supply on the horizon. We have tended to trade better into supply, but there is a concession this morning as people are looking for the Fed minutes to have a more hawkish tone."
The Treasury sold three-year debt yesterday, and it plans to auction 30-year bonds tomorrow. With today's 10-year note, the sales total $64 billion.
A the previous auction of 10-year debt, investors bid for 2.92 times the amount offered in March, the highest level in a year at the monthly sales. Today's sale is a re-opening of the 10-year note sold Feb. 12. The auctions will benefit from money managers reinvesting funds paid out to them from maturing securities, said John Gorman, head of dollar-denominated interest-rate products for Asia at Nomura Holdings Inc. in Singapore. The company is one of the 22 primary dealers that underwrite the U.S. debt.
