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Treasurys slip as traders brace for new supply

AP News
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Posted: Apr 11, 2011 5:34 PM
Treasurys slip as traders brace for new supply

Treasurys slipped on Monday as traders weighed the impact of new debt against a forecast of slower U.S. economic growth.

Treasury prices ended slightly lower as traders braced for $66 billion in new government bond sales this week. The Treasury Department's first debt auction is scheduled for Tuesday with the sale of $32 billion in 3-year notes.

The market got a lift when the International Monetary Fund cut its forecast for U.S. economic growth. In a report released Monday, the IMF lowered its outlook for U.S. economic growth to 2.8 percent in 2011, largely a result of higher oil prices. In January, the IMF had forecast 3 percent growth for the U.S.

Sluggish economic growth raises the appeal of low-paying but relatively safe investments like Treasurys.

The 10-year note fell 3.12 cents. That raised the yield to 3.59 percent from 3.58 percent from late Friday. Bond yields rise when prices fall.

The price of the 30-year bond lost 15.6 cents. Its yield was 4.65 percent, up from 4.64 percent. The yield on the 2-year note rose to 0.84 percent from 0.80 percent.

In the market for short-term Treasury bills, the three-month T-bill paid a 0.04 percent yield. Its discount was 0.05 percent.