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Long Bond hit as US Fed announces new buying

10-Yr: -13/32..1.704%.. USD/JPY: 83.16.. EUR/USD: 1.3064

US Treasuries ended on session lows as sellers took control following the FOMC rate decision.

The Committee announced it would begin buying $45-B worth of longer-term Treasury securities upon the expiration of its ‘Operation Twist’ program, and that the Fed Funds Rate will remain at Zeroish for as long as the unemployment rate remains above 6.5%.

Sellers piled on the Long bond which finished the day on its lows, and with a loss of more than 1 pt.

The selling ran the 30-yr yield up 6 bps on the session where it closed at its highest level since 6 November. This action has the Long yield sitting on its 200-Day MA.

he 10-yr T-Note fell close to 0.5 pt, forcing its yield up almost 5 bps to 1.697%. Shorter dated yields saw less of an impact as the 5-yr ticked up just 1.6 bps to 0.649%.

Not to be lost in today’s excitement was the $21-B 10-yr note reopening. The reopening drew 1.652% and a slightly less than average 2.95x bid/cover, 12-auction average 3.08x.

A weak indirect bidder participation of 24.2% was supported by a strong 42.7% takedown by direct bidders. Primary dealers were left with about 33% of the supply.

Selling swung the yield curve steeper with the 2-10-yr spread widening to 145.5 bps.

Thursday’s data is heavy with initial and continuing claims, retail sales, retail sales ex-auto, PPI, core PPI (8:30 a), and business inventories (10 a).

The US Treasury will reopen $13-B 30-yr bonds.

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