Monday, July 19, 2010

3.26% Guaranteed by US Government Treasury 10-year futures contracts held gains from a three-day rally as economists said reports this week will show U.S. housing starts fell and a measure of the outlook for economic growth declined.

Two-year yields were near a record low as declines in stocks around the world boosted demand for the relative safety of government debt. The difference between yields on 10-year notes and Treasury Inflation Protected Securities, a gauge of expectations for consumer prices, narrowed to 1.71 percentage points, three basis points away from a nine-month low.

"U.S. Treasuries are still attractive," said Sungjin Park, who helps oversee the equivalent of $51 billion in debt assets as head of fixed income in Seoul at Samsung Investment Trust Management, South Korea's largest private investor. "A double- dip recession is inevitable" in the U.S., he said.

The implied yield on 10-year futures contracts for September delivery was little changed 3.26 percent as of 10:47 a.m. in Singapore, based on electronic transactions at the Chicago Board of Trade. The price was 123 7/32.