(Updates market action, adds quotes)
By Richard Leong
NEW YORK, Dec 8 U.S. Treasury yields rose on
Thursday in line with their European counterparts after the
European Central Bank said it would trim its monthly pace of
bond purchases to 60 billion euros from 80 billion euros,
starting in April.
ECB President Mario Draghi, however, said the unexpected
move was not an outright winding-down of the central bank's
quantitative easing (QE) program, as policymakers would like to
see more evidence of a sustained pickup in inflation in Europe.
The ECB appeared to have left the door open to further
extend bond purchases and/or increase its monthly purchase pace
in the event the euro zone economy faltered.
Traders had worried the central bank would signal a clear
path to wrap up its asset purchase program, propelling bond
yields in Europe and the rest of the world higher.
"Initially it was disappointing, so we saw yields back up.
We have come off the highs (in yields) as we are digesting the
news. The reality is that they are extending the bond purchase
period to at least December," said Larry Milstein, head of U.S.
government and agency trading at R.W. Pressprich & Co. in New
"This isn't going to last forever, but they are saying we
are going to keep doing this until inflation comes back,"
Milstein said, referring to the ECB's QE plans.
The benchmark 10-year Treasury note's yield was
up 5 basis points at 2.396 percent, retreating from a session
high of 2.427 percent.
The 10-year yield held below the 2.492 percent level reached
on Dec. 1, which was its highest since July 2015, according to
The German 10-year Bund yield was up 8 basis points at 0.429
December 8 Thursday 10:06AM New York / 1506 GMT
US T BONDS MAR7 149-26/32 -1-12/32
10YR TNotes MAR7 124-112/256 -0-96/25
Price Current Net
Yield % Change
Three-month bills 0.4925 0.5 -0.005
Six-month bills 0.6125 0.6229 -0.005
Two-year note 99-198/256 1.1163 0.012
Three-year note 98-226/256 1.3899 0.020
Five-year note 99-158/256 1.8308 0.033
Seven-year note 99-146/256 2.1917 0.046
10-year note 96-124/256 2.3998 0.053
30-year bond 95-204/256 3.0912 0.062
DOLLAR SWAP SPREADS
Last (bps) Net
U.S. 2-year dollar swap 22.25 0.00
U.S. 3-year dollar swap 14.50 0.00
U.S. 5-year dollar swap 0.25 0.00
U.S. 10-year dollar swap -15.25 0.25
U.S. 30-year dollar swap -54.00 0.25
(Reporting by Richard Leong; Editing by Lisa Von Ahn and Paul