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CORRECTED-TREASURIES-Prices fall as French election outcome eases uncertainty
April 24, 2017 / 2:40 PM / 7 months ago

CORRECTED-TREASURIES-Prices fall as French election outcome eases uncertainty

 (Changes 10-year note price direction to down from up in
paragraph 7, and 30-year bond price direction to down from up in
paragraph 9)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, April 24 (Reuters) - U.S. Treasury prices fell on
Monday after centrist Emmanuel Macron's victory in the first
round of France's presidential race meant the country would stay
in the European Union and preserve the euro, fueling a selloff
of safe-haven assets.  
    Overall yields, which move inversely to prices, rose to
two-week highs as result of Macron's win.
    The French election result was viewed as positive for
Europe, reducing the risk of an anti-establishment scare 
similar in scale to that of Britain's vote to quit the EU and
the election of Donald Trump as U.S. president in November.
    Ahead of the election, Treasury prices had rallied as
investors sought protection against a potentially destabilizing
outcome.
    "A Macron victory derails a negative scenario, which means
that we won't see a threat to the euro or the European Union,"
said Bruno Braixinha, interest rates strategist, at Societe
Generale in New York.
    "Macron also translates to a different type politics in
France because he doesn't come from the two main parties. So the
expectation is that he will be able to jumpstart the French
economy," he added.
    In mid-morning trading, benchmark 10-year notes            
were down 15/32 in price to yield 2.289 percent, from 2.236
percent. Yields hit a two-week peak of 2.325 percent earlier in
the aftermath of the French election outcome. 
    The 10-year yield briefly dipped to 2.165 percent last week,
 the lowest since Nov. 10. The notes had struggled to hold below
strong technical resistance at yields of around 2.19 percent.
    U.S. 30-year bond prices were down 26/32, yielding 2.935
percent US30-YT=RR, up from Friday's 2.894 percent.
Thirty-year yields earlier touched a two-week peak of 2.964
percent.
    On the front-end of the curve, U.S. two-year yields were
also up at 1.241 percent           , from 1.184 percent last
Friday.
    Treasury supply is also in focus this week, with the auction
of $88 billion in two-year, five-year and seven-year notes.
    Investors are also awaiting a tax plan announcement by
President Trump on Wednesday.
    Last week, Trump promised a "big announcement" on
overhauling the U.S. tax code, a top campaign pledge. An
administration official said over the weekend the announcement
will consist of "broad principles and priorities."             

 (Editing by Bernadette Baum)
  
 
 

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