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Blind faith-or historic perspective (gold or dollar) is the matter of debate....Gold is rare, has significant costs to produce, is in high demand (demand exceed production)
US Treasuries slump again amid signs
Japan on mend
By Steven Scheer
NEW YORK, June 10 (Reuters) - Signs of economic recovery
in Japan brought more U.S. Treasury market bears out of
hibernation Thursday, as prices crumbled again and yields
continued a steady climb into their highest levels in well over a year.
Heavy selling in Asia before the U.S. market even opened pushed Treasuries lower early. The
long bond's yield had jumped to a 14-month high of 6.08 percent before short-covering and
bargain hunting stopped the bleeding around noon in New York.
''When New York walked in it was confronted with the dollar getting crushed overnight and
Japan's GDP was higher than expected,'' said Ray Remy, head trader at HSBC Securities (USA)
Inc. ''The market has a negative tone.''
In late trade, the benchmark 30-year bond was at 88-30/32, down 10/32 from Wednesday's
close. It's yield was at 6.06 percent -- its highest close since April 30, 1998 -- up from 6.03
percent.
It was the third straight bond market decline, in which yields have jumped about 10 basis points.
''It's all been momentum trades,'' said Vincent Verterano, head trader at Nomura Securities
International LLC. ''The price deterioration has been dramatic.''
A 1.9 percent rise in Japan's first-quarter Gross Domestic Product (GDP) growth -- annualized to
a 7.9 percent gain -- jolted the market and the dollar. In U.S. trading, Treasuries largely stuck to
narrow ranges.
(Note: this article is ''in progress''; there will likely be an update soon.)
biz.yahoo.com
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