Treasuries start the year lower

10-year yield.10.30am.top.pngClick chart for prices and yields. By Blake Ellis, staff reporter


NEW YORK (CNNMoney) -- It may be a new year, but U.S. Treasury prices are picking up right where they left off in 2010 -- lower.

Treasuries got a year-end boost during a holiday-shortened trading session Friday. Prices had trended sharply lower during the second half of 2010, as the economy showed signs of improvement and stocks gained momentum.

Stocks and bonds tend to move in opposite direction. When investors feel more confident about the economy, they are more willing to shift into riskier, and higher yielding, assets.

The downward slide in Treasury prices continued Monday as traders remained bullish about 2011, and the first trading session of the year kicked off with a strong report on manufacturing activity.

"We're seeing follow-through from the sentiment we saw at the end of the year, about a more positive economy and a rosier outlook," said David Coard, head of fixed-income trading at Williams Capital Group.

As stocks jumped, the price on the benchmark U.S. Treasury 10-year note fell -- pushing the yield up to 3.35%, from 3.30% late Friday. Bond prices and yields move in opposite directions.

Yields for the 30-year bond rose to 4.41% from 4.33%, while the 2-year note ticked up to 0.61% from 0.60%. The 5-year note climbed to 2.02% from 2.01%.

Looking forward: While Treasury yields are likely to continue rising in 2011, they could remain in a tight range in the first quarter -- with the 10-year note hovering between 3.25% and 3.65% -- until investors gain a clearer picture of the economic recovery.

Some cues will come from the government's closely-watched jobs report due Friday, Coard said.

Economists expect the report to show employers boosted payrolls by 132,000 last month, following a 39,000 gain in November. Also happening on Friday, Federal Reserve Chairman Ben Bernanke is scheduled to testify before the Senate budget panel. Coard said traders will be listening for an update on the health of the economy.

"The economy seems to be on solid footing, but the labor picture is key, so we have got to start hiring people to really have sustainable growth in the economy," Coard explained.

If the jobs picture weakens, or if other economic data reverse direction, or more overseas debt issues arise -- yields could be in store for a correction, he warned.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.24%4.32%
15 yr fixed3.25%3.36%
5/1 ARM3.27%3.37%
30 yr refi4.28%4.31%
15 yr refi3.30%3.34%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 16,501.65 0.00 0.00%
Nasdaq 4,148.34 21.37 0.52%
S&P 500 1,878.61 3.22 0.17%
Treasuries 2.69 0.00 0.07%
Data as of 9:13pm ET
Company Price Change % Change
Facebook Inc 60.87 -0.49 -0.80%
Bank of America Corp... 16.34 -0.03 -0.18%
Microsoft Corp 39.86 0.17 0.43%
Verizon Communicatio... 46.28 -1.15 -2.42%
Micron Technology In... 26.16 -0.09 -0.34%
Data as of 4:01pm ET

Sections

Officials recommend that states allow Tesla to sell cars directly to consumers and argue that banning those sales stifles competition. More

Hundreds of postal workers nationwide protested outside Staples' stores on Thursday. More

Federal regulators are poised to lay down new rules of the road for how Americans access the Internet. More

Schwinn, Trek and Cannondale are all iconic American bicycle brands. But none of them are made in the United States. More

Do you feel like you are overworked? Here are how other people deal with the stress and politics in their jobs. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.