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TREASURIES-Yields rise as Greek, euro zone leaders strike deal
* Greek deal reduces safe-haven bond buying
* Focus on Fed after hawkish Yellen speech
By Karen Brettell
NEW YORK, July 13 (Reuters) - U.S. Treasury yields rose
Monday after Greece and its European creditors agreed on a deal
that's likely to keep Greece in the euro zone, and as investors
anticipated a possible U.S. Federal Reserve interest-rate hike
in the near future.
Euro zone leaders made Greece surrender much of its
sovereignty to outside supervision in return for talks on an
86-billion-euro bailout to keep the near-bankrupt country within
the single currency union.
The news reduced safe-haven buying of U.S. debt and boosted
riskier assets including equities.
Yields also increased as investors anticipated the Fed is
closer to raising interest rates for the first time in nearly
ten years, after Fed Chair Janet Yellen said Friday she expects
a rate hike at some point this year.
"Greece is off the front burner, China is off the front
burner, now everyone is waiting for Yellen's remarks after her
comments on Friday, which were fairly hawkish," said Gennadiy
Goldberg, an interest rate strategist at TD Securities in New (KOSDAQ: 160550.KQ - news)
York.
Yellen is due to give her Humphrey-Hawkins (NasdaqGS: HWKN - news) testimony to
Congress on Wednesday and Thursday.
Benchmark 10-year notes were last down 17/32 in
price to yield 2.45 percent, after earlier rising as high as
2.47 percent, the highest since July 2. The yields had traded at
2.37 percent earlier on Monday before news of the Greek deal.
Investors now expect that the Fed is likely to begin raising
rates at its September meeting.
"I think they are very close to hiking rates and the market
is now finally starting to understand that," said Goldberg.
U.S. economic data will be closely evaluated for signs that
growth is improving at a rate that will allow the Fed to begin
raising rates.
The next major economic report will be retail sales data for
June, due out on Tuesday.
(Editing by Bernadette Baum)
