NEW YORK: U.S. Treasury debt prices fell in seesaw trade on Friday, with benchmark 10-year yields rising for a third straight week, as investors shifted away from safe-haven assets after euro zone negotiators agreed to extend Greece’s bailout.
In late trading, benchmark 10-year Treasuries were off 6/32 and yielding 2.122 percent, compared to 2.112 percent on Thursday. The yield had gone as high as 2.141 percent immediately after announcement of the agreement.
The deal extends heavily indebted Greece’s financial rescue by four months and removes the risk of Greece running out of money next month and possibly being forced out of the single currency area.
It also provides a breathing space for the new Athens government to try to negotiate longer-term debt relief with its official creditors.
Most other maturities also fell. The U.S. 30-year bond gave up gains but was last ahead 9/32 in price with a yield of 2.720 percent.
Friday’s price declines closed out a third straight week of yield increases for 10-year and 30-year maturities, a stretch for the 10-year last seen eight months ago and for the long bond during spring 2013, according to Thomson Reuters data.
Overall, Treasuries have been underperforming for weeks, as investors anticipated a Federal Reserve rate-hike, though the timing is unclear. The Merrill Lynch U.S. Treasury Index has lost 2.38 percent for the month, the worst monthly performance for the index since January 2009.
Next week, Federal Reserve Chair Janet Yellen will testify before Congress for her semi-annual address on monetary policy. The Fed has had near-zero interest rates in place since 2008.
“Next week, more important than Greece will be Janet Yellen’s testimony before Congress on Tuesday and Wednesday,” said Mary Ann Hurley, vice president in fixed income trading at D.A. Davidson in Seattle. “The market will be looking to Yellen for clarification.”
On Wednesday, investors bought Treasuries after minutes of a January Fed policy meeting seemed to suggest a later start to rate hikes. But on Thursday, better-than-expected weekly jobless figures shifted sentiment in favor of an earlier start to interest-rate increases.