Sep 12, 2011 (Bloomberg) -- Treasury 10-year note yields rose from a record low on speculation China may seek to buy more European bonds, easing the haven appeal for investors in U.S. government debt from the region’s widening sovereign-debt crisis.
The U.S. government sold $32 billion of three-year securities at a record low yield in the first of three note and bond offerings this week totaling $66 billion. Bill Gross, who runs the world’s biggest bond mutual fund at Pacific Investment Management Co., increased his holdings of Treasuries to the highest since December 2010. U.S. stocks rose.
“There’s a story that China is contemplating buying Italian sovereign debt,” said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc. “It places a little bit of hope in the market that someone sees some value out there. Obviously it’s better than Europe falling apart, which is what we hear every night.”
Yields on 10-year notes gained three basis points, or 0.03 percentage point, to 1.95 percent at 4:36 p.m. in New York, according to Bloomberg Bond Trader prices. The 2.125 percent securities maturing in August 2021 fell 9/32, or $2.81 per $1,000 face amount, to 101 17/32. The yields earlier touched 1.8770 percent, the lowest level on record in Federal Reserve data beginning in 1953.
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