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Treasurys unwind after Greece asks for bailout

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Treasury prices slipped and shed their safe-haven appeal Friday after Greece said it will seek a bailout from the European Union to abet its debt crisis.

What prices are doing: The benchmark 10-year note fell 11/32 to 98-14/32, pushing the yield up to 3.82%. Bond prices and yields move in opposite directions.

10yearyield.png
Click the chart for the latest prices and yields.

The 30-year bond slipped 13/32 to 99-11/32, and its yield rose to 4.67%.The 2-year note shed 2/32 to 99-28/32 with a 1.08% yield. The 5-year note was down 7/32 to 99-19/32 with a yield of 2.59%.

What's moving the market: Greek Prime Minister George Papandreou formally requested about $60 billion in financial aid from the EU and the International Monetary Fund on Friday -- a day after Greek bonds reached record-high yields of 8.8%, on par with debt for third-world countries.

U.S. debt prices rose on Greece's debt woes the day before, when Moody's cut Greece's credit rating a notch and the EU announced the country's 2009 deficit may total more than originally expected. That bad news for Greece was good news for U.S. debt issues, which are deemed a safe-haven alternative when other foreign debt markets are hurting.

On Friday, after Papandreou's request for aid eased worries that the country will find a solution to its debt, the U.S. bonds market unwound some of those safety bets.

Investors are also looking ahead to the Treasury Department's auction of $129 billion in securities next week. Anticipation of new supply usually keeps prices down ahead of auctions.

What analysts are saying: Investors have been "creeping to the exits," seeking to minimize their exposure to Greek debt for weeks, said Kevin Giddis, president of fixed income at Morgan Keegan.

And despite the bailout news, their uncertainty about the country's near-term fate still remains, he said. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.90%3.89%
15 yr fixed2.96%2.93%
5/1 ARM3.19%3.11%
30 yr refi4.00%4.00%
15 yr refi3.06%3.03%
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Index Last Change % Change
Dow 16,058.35 -469.68 -2.84%
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Treasuries 2.17 -0.03 -1.27%
Data as of 5:05pm ET
Company Price Change % Change
Bank of America Corp... 15.58 -0.76 -4.65%
Apple Inc 107.72 -5.04 -4.47%
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Ford Motor Co 13.72 -0.15 -1.08%
Microsoft Corp 41.82 -1.70 -3.91%
Data as of 4:03pm ET

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