Treasuries Posting Best Returns Since 2002 as Subprime Losses Stir Concern

(Bloomberg) -- So much for the bear market in
Treasuries.

Yields on 10-year notes fell below where they started in
January after climbing to a five-year high in June. Government
securities are on track to return 5.3 percent this year, the best
performance since gaining 12 percent in 2002, Merrill Lynch & Co.
index data show.


Read more at Bloomberg Bonds News

Mexican Peso, Bonds Drop After U.S. Jobs Growth Slows, Missing Forecast

(Bloomberg) -- Mexican peso-denominated bonds and
the currency fell on renewed concerns that weakness in the U.S.
housing industry will spread to the broader economy and curb
demand for Mexico's exports.

Yields on the Mexican government's 30-year bonds, its
longest peso-denominated maturity, touched a three-month high
after a U.S. government report showed employers added fewer jobs
than economists expected last month. The U.S. buys 80 percent of
Mexican exports.


Read more at Bloomberg Currencies News

China, Singapore, Malaysia, Sri Lanka, Thailand: Asia Local Bond Preview

(Bloomberg) -- The following events and economic
reports may influence trading in Asian local-currency bonds
today. Yields are from the previous session.

China: The nation needs to have ``more flexibility'' in its
exchange-rate policy, International Monetary Fund Managing
Director Rodrigo de Rato said. De Rato said he was concerned
there could be a ``reappraisal of risk which would curtail
market access,'' in a speech in Manila yesterday. The central
bank raised the deposit reserve ratio late July 30, requiring
commercial lenders to set aside more money as reserves for a
sixth time this year.


Read more at Bloomberg Bonds News

Treasuries Advance After Index of Corporate Bond Risk Increases

(Bloomberg) -- Treasuries rose as a gauge of
corporate bond risk surged, fueling speculation losses on
securities backed by subprime mortgages will worsen.

The yield on the 10-year note fell 1 basis point, or 0.01
percentage point, to 4.75 percent as of 11:46 a.m. in London,
according to bond broker Cantor Fitzgerald LP. The price of the 4
1/2 percent note due May 2017 rose 3/32, or 94 cents per $1,000
face amount, to 98 01/32. Yields move inversely to bond prices.


Read more at Bloomberg Bonds News

India, Indonesia, Malaysia, Taiwan, Thailand: Asia Local Bond Preview

(Bloomberg) -- The following events and economic
reports may influence trading in Asian local-currency bonds
today. Yields are from the previous session.

China: The government will further tighten monetary policy
after increasing lending and deposit rates last week, Hong Kong
Monetary Authority Chief Executive Joseph Yam said on Hong Kong
Commercial Broadcasting radio yesterday. Yam urged investors to
be careful as financial markets are growing more turbulent, the
broadcaster reported. The government will sell 28 billion yuan
($3.7 billion) of six-month notes tomorrow.


Read more at Bloomberg Bonds News

Turkish Stocks, Lira Gain on View Erdogan to Extend 21 Quarters of Growth

(Bloomberg) -- Turkish stocks, bonds and the lira
gained after voters re-elected Prime Minister Recep Tayyip
Erdogan, giving him a mandate to extend policies that won European
Union membership talks and helped bring 21 quarters of growth.

The ISE National 100 Index rose 3.8 percent to 54,966.6 as of
9:56 a.m. The lira rose 1.58 percent, trading at 1.253 to the
dollar. Yields on lira-denominated bonds fell 27 basis points to
17.19 percent, their lowest in 13 months, according to ABN Amro
benchmark prices. A basis point is 0.01 percentage point.


Read more at Bloomberg Emerging Markets News

India Bonds End Three-Day Gain; Chidambaram Calls for `Tight' Money Policy

(Bloomberg) -- India's 10-year bonds fell, ending
three days of gains, after Finance Minister Palaniappan
Chidambaram said the nation will keep a ``fairly tight''
monetary policy to curb inflation.

Yields rose from the lowest in five months on speculation
the central bank will raise interest rates or drain spare cash
from the banking system to slow price gains. Bonds also dropped
on concern a rally in crude oil prices will stoke inflation in
India, which imports three-fourths of its energy requirements.


Read more at Bloomberg Bonds News

China, Indonesia, Philippines, Taiwan, Thailand: Asia Local Bond Preview

(Bloomberg) -- The following events and economic
reports may influence trading in Asian local-currency bonds
today. Yields are from the previous session.

China: The central bank sold 10 billion ($1.3 billion) yuan
of one-year zero-coupon bonds at a yield of 3.0928 percent
yesterday. China Development Bank will auction 20 billion yuan of
10-year floating rate bonds today. The Ministry of Finance will
sell 35 billion yuan of three-year fixed-rate notes on July 13.


Read more at Bloomberg Bonds News

Philippine Bonds Drop on Concerns Deficit to Widen: World's Biggest Mover

(Bloomberg) -- Philippine 10-year bonds declined,
the biggest fluctuation of any government debt market today, on
concern the nation will miss its revenue target.

Yields rose to the highest in eight months after the
Philippine Star reported that the government may fail to meet
the goal by 25 billion pesos ($543 million) this year, citing
estimates from the Development Budget Coordination Committee, an
inter-agency group that sets economic targets.


Read more at Bloomberg Bonds News

Treasuries Decline After Fed Says Inflation Remains `Predominant' Concern

(Bloomberg) -- Treasuries fell after the Federal
Reserve said inflation is still the greatest risk facing the
economy while keeping the benchmark lending rate at 5.25 percent
for an eighth consecutive meeting.

Yields on two-year notes, more sensitive than longer-
maturity debt to Fed rate changes, rose the most in two weeks as
traders pared bets the central bank will lower its target rate
this year after increasing it 17 times from June 2004 to June
2006. Two-year yields yesterday touched a one-month low.


Read more at Bloomberg Bonds News

S.Africa government bonds weaken on US treasuries sell-off

(Reuters) - South African government bonds weakened sharply in early trade in Johannesburg, in line with a softer rand currency and a U.S treasuries sell-off overnight, traders said.

Yields on the most-active 2010 issue were last 12.5 basis points higher at 8.775 percent, after jumping 16 basis points earlier, while those on the benchmark paper due in 2015 added 13 basis points to 8.25 percent.


Read more at Reuters Africa

Treasuries May Rise on Speculation Asian Stock Losses to Spur Debt Demand

(Bloomberg) -- U.S. Treasuries may advance on
speculation a decline in Asian stock markets will increase demand
for the relative safety of government securities.

Yields near the highest in more than nine months may attract
investors for a second day after equity benchmarks from Tokyo to
Sydney tracked a slide in U.S. stocks. Shares in the U.S.
yesterday completed their biggest two-day decline since March
after first-quarter labor costs rose more than forecast.


Read more at Bloomberg Bonds News

U.S. Treasury Yields Hold Near Four-Month High Before Durable Goods Report

(Bloomberg) -- U.S. 10-year Treasury yields held near
their highest since January before a report today expected to show
orders for goods rose for a third month in April.

Yields on 10-year Treasuries have risen 35 basis points in
the past three months as U.S. stock indexes advanced. Federal
funds futures contracts show traders expect a 23 percent chance of
a rate cut by September, dropping from 46 percent two weeks ago.
Orders for goods made to last several years probably increased 1
percent after a 4.3 percent jump, according to the median forecast
of economists in a Bloomberg News survey.


Read more at Bloomberg Bonds News

India, Malaysia, South Korea, Thailand, Singapore: Asia Local Bond Preview

(Bloomberg) -- The following events and economic
reports may influence trading in Asian local-currency bonds
today. Yields are from the previous session.

China: The government may allow qualified foreign
institutional investors to buy an additional $20 billion of
yuan-denominated stocks and bonds, China Business News reported
yesterday citing unidentified government officials. The
expansion of the so-called QFII program from the current $10
billion quota may be the result of the second Strategic Economic
Dialogue this week between the U.S. and China, the government
newspaper said.


Read more at Bloomberg Bonds News

Treasuries Drop, Pushing Yields to Three-Month Highs, on Economic Outlook

(Bloomberg) -- Treasuries fell, pushing the
benchmark 10-year note's yield to a three-month high, as traders
speculated the U.S. economy is gathering momentum.

Yields strengthened as traders reduced bets on a cut in
borrowing costs by the Federal Reserve later this year. Richmond
Fed President Jeffrey Lacker said today he is still worried
about inflation.


Read more at Bloomberg Bonds News