Treasury two-year notes rose for a second day as U.S. equity futures declined and
speculation eased that the Federal Reserve will increase borrowing costs as early as
next week. The two-year note's yield fell 2 basis point, or 0.02 percentage point, to
2.87 percent at 8:28 a.m. in New York, according to BGCantor Market Data. It touched
2.94 percent in European trading. The price of the 2.625 percent security due in May
2010 rose 1/32, or 31 cents per $1,000 face value, to 99 17/32. The yield on the 10-
year note was little changed at 4.20 percent.Traders saw a 88 percent chance the Fed
will leave its 2 percent target rate for overnight lending between banks unchanged on
June 25, up from 74 percent on June 15 futures on the Chicago Board of Trade show.
The balance of bets is on a quarter-percentage point boost. The market is .125 better
in discount this morning.
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