treasury futures brokers

treasury futures brokers

February 22nd, 2015

Treasury futures rose amid speculation over the outlook for Greece’s bailout negotiations a day before Janet Yellen may address the future of potential interest-rate increases in congressional testimony.

U.S. debt gained a second day after Greece said it would deliver to euro-area finance ministers on Tuesday morning its list of commitments required to extend the bailout for four months. Treasuries were at the cheapest levels against their Group of Seven peers in eight years, something Federal Reserve Chair Yellen’s comments may indicate is justified or not.

“Greece is not off the radar,” said Thomas Roth, senior Treasury trader in New York at Mitsubishi UFJ Securities USA Inc. “That’s back in the equation. The question is whether they can come up with something that’s acceptable to everyone. It’s not a slam dunk.”

Ten-year yields fell five basis points, or 0.05 percentage point, to 2.06 percent as of 5 p.m. New York time Monday, based on Bloomberg Bond Trader data. The price of the 2 percent note maturing in February 2025 rose 15/32, or $4.69 per $1,000 face amount, to 99 15/32.

The 30-year bond yield fell six basis points to 2.66 percent.

The amount of Treasuries traded through ICAP Plc, the largest inter-dealer broker of U.S. government debt, declined by 32 percent from Feb. 20 to $239.9 billion today. The daily average this year is $358 billion.

Approval of Greece’s package of economic measures would offer a reprieve for the indebted nation and stave off a funding crisis, while a rejection would trigger another round of emergency negotiations. The ministers are scheduled to hold a conference call Tuesday.

Treasury Futures: Economic Data

Treasuries were supported as purchases of existing houses dropped 4.9 percent from December to a 4.82 million annualized rate, the least since April, figures from the National Association of Realtors showed Monday in Washington.

Fed policy makers signaled at their Jan. 27-28 meeting they’re willing to keep interest rates low for longer given risks to the economy. Yellen is scheduled to testify in the Senate on Tuesday and in the House of Representatives the following day.

Minutes released last week of the Fed’s January meeting showed many policy makers favored keeping the benchmark interest rate at virtually zero “for a longer time” amid slow wage growth and international turmoil. The gathering took place before a report showed wages and payrolls jumped in January.

Commodity Futures: ‘More Balanced’

“People are expecting Yellen to be more balanced,” said Ian Lyngen, a government-bond strategist at CRT Capital Group LLC in Stamford, Connecticut.

The U.S. central bank has indicated it will raise borrowing costs as the labor market strengthens, yet it acknowledged in the January minutes that officials saw “the continuing weakness of core inflation measures as a concern.”

The central bank’s preferred gauge of inflation, a measure tied to personal consumption, has stayed below policy makers’ 2 percent target since 2012.

Traders see a 51 percent likelihood the Fed will raise rates by its September meeting, versus 39 percent at the end of last month, according to futures-trading data analyzed by Bloomberg.

- Susanne Walker in New York at Bloomberg.