Bond Market Wrapup for June 22, 2012
Treasuries retreated after the European Central Bank said it will relax some of the rules on collateral that banks can offer in-exchange for funds from the central bank. The Frankfurt-based central bank said the Governing Council will lower eligibility requirements for asset-backed securities and amend rating thresholds. Benchmark 10-year notes slid the most in two weeks after the ECB loosened collateral requirements to facilitate access to its funds by banks, which in turn will ensure credit availability for households and small businesses across Europe. Ten-year yields rose six basis points to 1.67 percent in late afternoon trading, New York time.
Yield on 30-year Treasury Bonds jumped seven basis points, or 0.07 percentage points, to 2.76 percent. 10 Year Treasury Yield – 1 Month Chart Bond Funds were down on the day with the iShares Barclays 20 Year Treasury Bond ETF (TLT) shedding $1.69, or 1.33 percent, to settle at $125.02, while the Vanguard Total Bond Market ETF (BND) shed 17 cents, or 0.20 percent to finish at $84.13 for the week.
US stocks bounced back Friday, recouping part of prior day’s losses after reports coming out of Europe suggested German, French, Spanish and Italian leaders have agreed to cooperate on a EUR130 billion growth plan for the 17-nation currency block, equivalent to 1 percent of the region’s economic output . The Dow Jones Industrial Average (DJIA) climbed 67.21 points, or 0.5 percent, to 12,640.78, after taking the second biggest knock of the year Thursday.
The Dow is off one percent for the week after three consecutive weeks of gains while 28 among its 30 components closed higher for the day. Bank of America (BAC), Merck (MRK) and JP Morgan Chase (JPM) were the biggest percentage gainers. Only Caterpillar (CAT) and Wal-Mart (WMT) closed lower for the …
