Friday, January 13, 2012

Concerns over Europe keep traders buying Treasurys (AP)

Treasury prices were mixed Monday as traders weighed concern over Europe's debt crisis against news that U.S. consumers are back to borrowing again.

Consumer borrowing jumped by $20.4 billion in November, the Federal Reserve reported Monday. That's the largest gain in a decade and a possible sign that Americans are reversing some of their thrifty habits.

The price of the 10-year Treasury note dipped after the report came out but was still slightly higher on the day. The note was up 3.12 cents for every $100 invested. Its yield fell to 1.96 percent from 1.97 percent late Friday.

Worries that Europe's debt troubles will turn worse kept demand high for ultra-safe Treasurys. Italy's long-term borrowing costs remained above 7 percent, even as the leaders of France and Germany met Monday to discuss the region's crisis.

Traders said Treasury prices are likely to slip this week as the government sells $66 billion in debt to banks and other bond buyers. The first auction of notes comes Tuesday with the sale of $32 billion in three-year notes.

In other trading Monday, the 30-year Treasury bond fell 12.5 cents for every $100. Its yield rose to 3.02 percent from 3.01 percent Friday. The yield on the two-year note was 0.26 percent, the same as Friday.

In the market for short-term bills, the three-month T-bill paid a 0.01 percent yield.

Source: http://us.rd.yahoo.com/dailynews/rss/europe/*http%3A//news.yahoo.com/s/ap/20120109/ap_on_bi_ge/us_credit_markets

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