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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Treasury Draws Negative Yield for First Time |
Bloomberg - Oct. 25, 2010 - By Daniel Kruger and Cordell Eddings
The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in halting deflation.
The securities drew a yield of negative 0.55 percent, the same as the average forecast in a Bloomberg News survey of 7 of the Federal Reserve’s 18 primary dealers. The sale was a reopening of an $11 billion offering in April. Conventional Treasuries rallied amid speculation about the amount of debt the Fed may purchase to spur the economy in a strategy called quantitative easing.
“It signals people’s expectation of the Fed being able to create some inflation with the QE program,” said Alex Li, an interest-rate strategist in New York at Deutsche Bank AG, one of 18 primary dealers required to bid at Treasury auctions. “With nominal rates so low, in order have high TIPS breakevens you’ve got to have negative real yields on the five-year.”
Holders of TIPS receive an adjustment to the principal value of their securities equal to the change in the consumer price index, in addition to a fixed rate of interest that is smaller than the interest paid to a holder of conventional debt. The difference between is known as the breakeven rate.
The fixed payment on five-year TIPS, known by traders as the real yield, has been pushed below zero because the increase in the consumer price index is greater than the yield on regular five-year U.S. notes, which has fallen along with other Treasury yields as investors sought the relative safety of U.S. government debt.
Only TIPS
The U.S. can only sell debt at a negative yield on inflation-linked debt, according to McKayla Barden, a spokeswoman at the Bureau of the Public Debt. Conventional fixed-coupon Treasuries of a given maturity could be sold at price above face value with a zero percent coupon if yields in the market on that maturity were negative. The government began selling inflation-protected debt in 1997.
Thirty-year bond yields dropped three basis points to 3.9 percent at 1:48 p.m. in New York, according to BGCantor Market Data. Yields on 10-year notes fell two basis points to 2.54 percent.
At today’s auction, the bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.84. The average at the last 12 sales was 2.38. Indirect bidders, a class of investors that includes foreign central banks, purchased 39.4 percent of the notes today. At the April sale, they bought 23.1 percent, the lowest in the history of the securities.
The last five-year TIPS auction, on April 26, drew a yield of 0.55 percent, which was the lowest on record. The bid-to- cover ratio was 3.15.
Note Sales
Today’s sale was the first of four note offerings this week totaling $109 billion. The U.S. also will auction $35 billion in two-year notes, $35 billion of five-year securities and $29 billion in seven-year debt in sales that begin tomorrow.
For the complete article visit Bloomberg.com
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