Yields little changed as investors focus on Friday employment report

Interest rates little changed in bond market

NEW YORK — Interest rates were little changed in the bond market Friday, capping off a week of big fluctuations as the government sold $82 billion in new debt.

The yield on the 10-year Treasury note fell to 3.88 percent in late trading, from 3.89 percent late Thursday. The yield is often used as a benchmark for consumer loans. The price of the 10-year note maturing in February 2020 rose 3/32 to 97 28/32.

The 10-year note yield has remained in a tight range throughout the day as investors avoid making big bets.

“There’s no supply for another two weeks, so there’s no real reason for the market to sell off,” said Tom di Galoma, head of U.S. rates trading at Guggenheim Partners. Traders will typically sell bonds off ahead of Treasury auctions in hopes of getting lower prices when new debt is sold.

Treasury prices edged slightly higher during the day as bond traders kept a skeptical view of Greece’s unfolding debt crisis, di Galoma said. Investors tend to bid up prices of ultrasafe Treasury securities if they expect turmoil in other financial markets.

Bond yields have wavered throughout the week as investors entered a new round of auctions apprehensive that the latest supply of debt would saturate the market. The yield on the 10-year note rose above 4 percent Monday for the first time since June, but is now about even with where it closed last week.

Strong demand at auctions throughout the week, including for $21 billion in 10-year notes on Wednesday, eased those concerns and drove yields down from their highs on Monday.

In other trading, the yield on the two-year note that matures in March 2012 was unchanged at 1.07 percent. Its price was 99 28/32.

The yield on 30-year bond that matures in February 2040 fell to 4.74 percent from 4.75 percent. Its price rose 8/32 to 98 5/32.

The yield on the three-month T-bill that matures July 8 was unchanged from 0.15 percent. Its discount rate was 0.16 percent.

Augstums reported from Charlotte, N.C.