Treasurys drop after Europe auctions go well

AP News
Posted: Dec 01, 2011 4:53 PM
Treasurys drop after Europe auctions go well

Treasury prices slipped Thursday after France and Spain had successful auctions of new debt.

The strong demand for French and Spanish bonds eased fears in the markets about Europe's debt problems. That diminished the appeal of ultra-safe U.S. government debt, sending yields on Treasurys slightly higher.

The yield on the benchmark 10-year Treasury note rose to 2.10 percent Thursday from 2.08 percent late Wednesday. Its price fell 25 cents per $100 invested.

Demand for safety assets was also weakened after Mario Draghi, the European Central Bank president, made comments in a speech to the European Parliament suggesting that the ECB was prepared to play a larger role in addressing Europe's debt crisis.

Investors have been hoping that the ECB would support markets for European government debt by making aggressive purchases of bonds issued by struggling countries like Italy. To date, that hasn't happened.

The yield on the 30-year bond rose to 3.10 percent from 3.06 percent. Its price fell 71.9 cents.

The two-year note's yield was unchanged at 0.26 percent. The yield on the three-month T-bill was zero percent. Its discount wasn't available.