U.S. 30-Year Yield Rises Most in 2 Years on Chinese Stocks Surge

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Treasuries fell for the first time in five days, pushing up 30-year bond yields by the most since July 2013, as Chinese stocks surged the most in six years, crimping demand for the haven of government debt.

Government bonds in Germany, Japan and Australia also fell after rallying earlier this week amid a slump in Chinese equities and commodities as Greece rushed to come up with an economic plan to stay in the euro. U.S. debt extended losses after a $13 billion auction of securities produced a higher-than-forecast yield.

“It’s a reversal after a calm overnight session and a rebound in Chinese stocks,” said Michael Lorizio, a senior bond trader at Manulife Asset Management in Boston.

Thirty-year bond yields rose 15 basis points, or 0.15 percentage point, to 3.12 percent as of 5 p.m. New York time, according to Bloomberg Bond Trader data. The 3 percent securities maturing in May 2045 fell 2 26/32, or $28.13 per $1,000 face amount, to 97 20. It was the biggest increase in yield since a 22 basis point rise on July 5, 2013.

Benchmark 10-year note yields rose 13 basis points to 2.32 percent. The yield touched 2.17 percent on Wednesday, the lowest since June 2.

China Watch

Global markets recovered as Chinese stocks staged their biggest rebound since 2009, easing at least for the moment concern that the world’s second-largest economy is headed for a slump that not even policy makers can prevent.

Greek Prime Minister Alexis Tsipras is under pressure to show how far he’s willing to go to keep Greece in the euro as European leaders express skepticism he can deliver tough economic-policy changes before the June 12 deadline.

“If we do get resolution on some of these global elements, I’m not sure that yields go back to where they were before with 10-year yields back at 2.50 percent,” said William Marshall, an interest-rate strategist at Credit Suisse Group AG in New York, one of 22 primary dealers that trade with the Fed.

The 30-year bonds sold at auction yielded 3.084 percent, compared with an average forecast of 3.081 percent in a survey of six primary dealers. Demand was down as the bid-to-cover ratio, which gauges demand by comparing the amount bid with the amount offered, was 2.23, compared with an average of 2.38 at the past 10 sales.

Treasuries remained lower even as more Americans than forecast filed for unemployment benefits last week, representing a pause in the pace of labor-market improvement. Jobless claims climbed by 15,000 to 297,000 in the week ended July 4.

The International Monetary Fund cut its forecast for global growth this year, citing a weaker first quarter in the U.S. and warning that financial-market turbulence from China to Greece clouds the outlook.

German 10-year bund yields added five basis points to 0.72 percent. Yields on Australia’s 10-year debt increased six basis points to 2.81 percent and those on similar-maturity Japanese bonds added three basis points to 0.448 percent.

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