Friday, March 12, 2010
Treasury security prices fell Thursday at all maturities except the very longest. The 30-year bond gained on strong demand for the security at yesterday's auction of $13 billion of the bonds. The bid-to-cover ratio was 2.89, the highest level since September. Direct bidders bought more of the issue than indirect bidders for the first time since the 30-year bond was reissued in 2006. The yield on the two-year note jumped five basis points to 0.95%. The yield on the benchmark 10-year note rose one basis point to 3.73%.
The U.S. trade deficit unexpectedly narrowed 6.6% to $37.3 billion from $39.9 billion in December, the Commerce Department reported yesterday. Imports fell 1.7% to $180 billion, the first drop in five months, as refineries imported the fewest barrels of oil in a decade. Exports decreased by $500 million to $142.7 billion, the first decline in nine months, as shipments of aircraft and autos fell.
First-time claims for unemployment benefits fell by 6,000 to 462,000 in the week ended March 6, the Labor Department reported yesterday. The four-week moving average of claims, a less volatile measure, increased to 475,500 from 470,500 the prior week. Continuing claims rose by 37,000 to 4.56 million in the week ended February 27. This does not include those receiving extended benefits under federal programs. The number of people who have used up their traditional benefits and are now collecting extended benefits decreased by about 174,830 to 5.69 million in the week ended February 20. The Senate approved a bill Wednesday that would provide another $138 billion in extended unemployment benefits and additional aid to states. Federal Reserve Bank of New York President William Dudley said the government needs to reduce budget deficits even though the economy is weak. "The economic recovery is still very fragile," Dudley said in a speech in London yesterday. Nonetheless, failure to address rising deficits "is a risky strategy" and could undermine investor confidence, he said.
The information contained herein has been obtained from sources deemed to be reliable: however Southeast Corporate does not guarantee its accuracy or completeness. All opinions and estimates included in this report constitute Southeast's judgment as of the date of this report and are subject to change without notice.
