Treasurys mixed on concerns over Greece

AP News
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Posted: May 06, 2011 5:17 PM
Treasurys mixed on concerns over Greece

Treasurys were mixed Friday, as shorter-dated notes rose on speculation that Greece could drop the euro currency. But the 30-year bond fell on signs that the U.S. economy was strengthening.

A report by a German magazine on Friday claimed Greece was considering pulling out of the European Union's currency. Greece's government strongly denied the claim.

Even so, the report sent the euro tumbling and boosted the dollar. When traders buy dollars they often put them in Treasurys.

The price of the 10-year Treasury note gained 6.2 cents for every $100 invested in Friday afternoon trading. The 10-year yield was at 3.15 percent, the same as late Thursday. The yield on the two-year note also slipped to 0.56 percent from 0.58 percent.

However, expectations that the U.S. economy will continue to strengthen pushed down prices of long term bonds. U.S. businesses created 268,000 jobs in April, the biggest monthly total in more than five years. The gains were solid across an array of industries, including construction. Treasurys tend to fall on stronger economic reports and rise on signs of turmoil.

"Economic momentum has not been lost," said Sung Won Sohn, economics professor at the Smith School of California State University. "There are enough tailwinds to move the economy and the job market forward."

The price of the 30-year bond fell 46.8 cents per $100 invested, while its yield rose to 4.28 percent from 4.26 percent late Wednesday.

In the market for short-term Treasury bills, the three-month T-bill paid a 0 percent yield. Its discount was 0.01 percent.