European debt crisis pushes rates lower

An auction of 2-year Treasurys sells for 0.769%, a record low, as many investors seek safety from stock market and currency volatility.

By Charley Blaine May 25, 2010 1:42PM
Updated: 7:05 p.m. ET

If nothing else, the European debt crisis is pushing U.S. interest rates substantially lower.

Today's evidence: a $42 billion auction of two-year Treasury notes produced a record-low yield of 0.769%.
The bid-to-cover ratio, a key measure of investor demand, was 2.93, meaning there were $2.93 of bids for every dollar auction. That was down from the recent average of $3.09.

The auction was accompanied by a drop in yields across the world of bonds. The 10-year Treasury yield was 3.16% at the end of the day, down from 3.23% on Monday and 3.66% on April 30.

That's great for homebuyers, if they want to buy. Bankrate.com put the national average rate for a 30-year fixed-rate at 4.87% today, close to the lowest rates of the year.

The rate on a four-year loan for a new car is 6.34%, down from 6.41% a week ago and 6.8% at the beginning of the year.

It's a disaster for savers. A six-month certificate of deposit earns 0.89%, down from 0.9% last week and 5.3% in July 2006.

Interest rates have declined as investors have sought safety and bought U.S. dollar and bonds.
1Comment
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min
Sponsored by:

MARKET UPDATE

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Market index data delayed by 15 minutes

[BRIEFING.COM] The headlines generally favored Tuesday being another good day for the stock market.  Instead, it was just a mixed day with modest point changes on either side of the unchanged mark for the major indices.

For the most part, the stock market was a sideshow.  The main trading events were seen in the commodity and Treasury markets, both of which saw some decent-sized losses within their respective complex.

Dollar strength was at the heart of the weakness in ... More


Currencies

NAMELASTCHANGE% CHANGE
There’s a problem getting this information right now. Please try again later.
Sponsored by:

VIDEO ON MSN MONEY